Inchcape turns in strong first half UK performance

Inchcape turned in a strong UK performance in the six months to 30 June with turnover up 11.2% to £1.39bn and trading profit up 2.9% to £38.5m

The brands it represents continue to outperform the total market and like-for-like retail revenues grew 10.3% over the period. Inchcape said that it had seen strong growth in aftersales following its investment in call centres.

Its revised online offer also delivered with a 24% year on year improvement in lead generation in the first half. Its trading margin fell from 3% last time to 2.8% due to a higher contribution of vehicle sales to its gross profit, lower used car margins for some brands and investment in its IT systems.

“We continue to expect to deliver a solid performance in the UK in 2015,” it said. Worldwide Inchcape Group saw pre-tax profits decline 5.5% to £153m in the first half on turnover up 1.3% to £3.4bn.

Recently appointed group CEO Stefan Bomhard, said:  “The Group has continued to grow both revenue and underlying profit in the first half of 2015.

“We are benefitting from broad based growth across our value drivers, including our high margin aftersales where the new car growth of recent years is starting to translate into a growing, high-retention 1-5 year car parc in a number of our markets.

“I have now spent close to 100 days in the business and have used this time to visit all of our key markets, meet with our people and our core OEM brand partners. I am confident about the future of Inchcape and the long term upside potential across our range of value drivers, our OEM relationships and the markets in which we operate.”

Zeus Capital analyst Mike Allen said Inchcape’s performance was “solid.

“The outlook for the UK is fairly favourable, with the company expecting market conditions to remain good. They have noticed more self-registration activity in the market, but will not use this as a major tactic to drive volume. The brand mix should also be favourable for new product launches during H2 2015, and the used car market is said to remain robust.”

Inchcape H1 UK Performance