Inchcape updates on distribution ambitions in first quarter results

As it prepares to offload its UK retail business to US-based Group 1 for £346 million, Inchcape is reporting healthy group revenues of £2.3 billion.

Turnover rose 5% driven by a combination of organic expansion and strategic acquisitions, albeit tempered by currency exchange fluctuations.

As part of its strategic realignment in which it agreed to divest its UK retail operations, the business said it would launch a £100 million share buyback programme upon completion of the deal. The transaction is expected to complete in Q3 2024, subject to FCA approval.

Inchcape's UK dealership portfolio includes Audi, BMW/Mini, Jaguar Land Rover, Lexus, Mercedes-Benz, Smart, Porsche, Toyota, Volkswagen and Volkswagen Commercial Vehicles. On an aggregate basis, these dealerships sell more than 63,500 new and used vehicles, and 24,000 corporate units, annually.

Inchcape said it was fully committed to becoming a higher value pure-play distribution business which was evident through recent contract wins with Ford in Estonia and Forland in Ecuador.

The company said it continues to gain momentum in the Asia-Pacific region, witnessing organic growth bolstered by strategic acquisitions across various markets.

Meanwhile, Inchcape's performance in Europe remains ‘exceptional’, driven by the fulfilling of orders that have accumulated or backlogged over time.

Encouraging signs emerge in the Americas markets, with key regions showing signs of stabilising, auguring well for the future.

Inchcape maintains its outlook for FY 2024, projecting moderate growth on a constant currency basis. However, the company anticipates a return to higher growth levels over the medium to long term.

Group chief executive Duncan Tait (pictured) expressed confidence in the company's trajectory, insisting that the strategic divestment of the UK retail business was a pivotal move towards becoming a pureplay distribution entity.

“With our global market leadership position, digital and data capabilities to support our OEM partners, our distribution platform is well positioned for the future, and we remain confident about the medium to long-term outlook for the group,” he said.