Record first half for Inchcape
Record sales at international auto group, Inchcape, have led to double-digit growth in pre-tax profits after a strong financial performance in global markets.
The group has reported turnover to the end of June 2013 of £3.3bn but warned that competitive pressure on margins in the UK and Russia is expected to continue. Global pre-tax underlying profits of £147m were up 10.7% on the same period last year.
The group said 70% of its trading profits were generated from Asia Pacific and the Emerging Markets but results in the UK continue to be strong with a record trading profit of £38.0m in the first half, up 2.2% year on year.
However, there has been some pressure on UK retail margins which are down 0.2 percentage points to 3.0%. At the time of 2012 full year results, Inchcape said that UK margins were at record levels.
Sales in the UK retail division were up by 4.8% to £1.12bn but trading profits were down by 0.9% to £33.5m.
The group issued a neutral statement saying: In a very competitive new car market, our UK retail business has delivered a solid volume and market share performance. Our used car volumes and aftersales activities were in line with our expectations and we started to benefit from the gradual recovery of the one-to-five year car parc.
Inchcape sold its Ford businesses to Group 1 Automotive in February but is investing in facility upgrades. It is preparing for the installation of ibrand infrastructure at five UK BMW locations for a Q4 launch and completed major VW corporate identity upgrades at Wirral and at Swindon.
The next six months we will also see the completion of an enlarged BMW, Mini and Motorrad retail centre in Sunderland and a full upgrade at BMW Norwich.
Chief executive, Andre Lacroix, told shareholders: We grew our revenue by 6.6% in actual currency as we benefited from our geographic spread and from the acquisition of Trivett, Australia’s leading luxury and premium automotive group.
Inchcape is engineered for sustainable earnings growth and we continue to expect the group to deliver a robust performance in 2013 despite competitive pressure on vehicle margins in some of our markets.
The board rewarded shareholders with an interim dividend of 5.7p, an increase of 43%, and announced a £100m share buyback programme over the next 12 months.