Inchcape, the UK-based international automotive distributor and retailer, booked first half sales of GBP3.1bn, up 6.1% year on year and operating profit up 10.1% to GBP138.4m.
Operating margin was 4.5% versus 4.3% in H1, 2011.
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Groups CEO André Lacroix said: “We have delivered a robust performance in the first half of the year, growing revenue by 6.1% and underlying operating profit by 10.1%. This is a testament to the strength of Inchcape’s unique business model and the effectiveness of our differentiated Customer 1st strategy. We have made further progress on our top five priorities of growing market share, growing aftersales, improving margin, controlling working capital and selective capital expenditure investment.
“The group started 2012 well with a performance ahead of expectations in the first quarter; in the second quarter we have benefited from strong growth in the premium and luxury segments in the UK and across Asia Pacific and the emerging markets.” This, combined
He added that the group operates in the right economies, with the right brands and trades in the right categories given its scale of presence in Asia Pacific and the emerging markets, focus on premium and luxury brands and diversified profit streams.
“We believe Inchcape is engineered for growth and we expect the group to deliver a robust performance in 2012.”
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By GlobalDataEarnings per share (EPS) rose 6.6% to 20.9p and an interim dividend of 4.0p (H1 2011 3.6p) was declared
In the second half, Inchcape expects demand for premium and luxury vehicles to remain strong in the UK which will continue to outperform the industry.
“In Europe, we expect demand for new cars to remain weak and we do not expect trading conditions to improve in the short term given the level of consumer confidence and challenging economic conditions,” it said.
“In Asia Pacific and the emerging markets, we expect growth to continue, albeit at a slower rate, as retail customers are becoming more concerned about the state of the global economy. The demand for new cars in Australia is expected to remain robust given the strong fundamentals of the economy.
“We remain cautious on new vehicle margin given the level of competitive activity we are seeing in the UK and Europe, the increased level of price activity in the emerging markets and the strength of the yen.
“We will leverage our aftersales business which continues to perform well and represents around 50% of our gross profit.”
