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Inchcape fuelled by Singapore and Australia

RESULTS: Luxury car retailer Inchcape outperformed in the first six months of the year as trading moved up a gear in key markets.
August 1, 2014

Trading at luxury car retailer Inchcape (INCH) revved up in the first six months of the year as market conditions accelerated in Singapore, Greece and Australia.

IC TIP: Hold at 642p

The Greek new car market grew by 24 per cent as the country started to recover from years of economic misery. That drove top-line growth at Inchcape's European business and pushed up divisional trading profit by 14 per cent to £11.4m. In Singapore, where the new car market was up nearly 20 per cent year on year, Inchcape won market share, helping more than double profits in the South Asia division. Chief executive Andre Lacroix expects further growth from Singapore in the second half. The Australian business was another strong performer, with a big margin improvement driving a 23 per cent jump in profits.

These gains offset a slightly weaker spell on Inchcape's home turf. UK like-for-like sales accelerated 13 per cent to £1.22bn, but profits declined as pricing came under pressure. At group level, however, the underlying pre-tax profit - which excludes exceptional items and gains from property disposals - grew 14 per cent. Strong cash generation has prompted management to announce a £100m share buyback programme over the next 12 months.

Broker Exane expects pre-tax profit of £284m for the full year, giving EPS of 45p, up 5 per cent year-on-year.

INCHCAPE (INCH)
ORD PRICE:642pMARKET VALUE:£2.9bn
TOUCH:642-643p12-MONTH HIGH:694pLOW: 556p
DIVIDEND YIELD:2.8%PE RATIO:13
NET ASSET VALUE:315p*NET CASH:£160m

Half-year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20133.31138.521.25.7
20143.34162.127.16.3
% change+1+17+28+11

Ex-div: 06 Aug

Payment: 05 Sep

*Includes intangible assets of £581m or 127p a share