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Inchcape inches along

Global markets have proved fairly resilient for automotive giant Inchcape, prompting another round of share buybacks for investors
August 2, 2015

Inchcape (INCH) investors are in for another cash windfall this year after the automotive retailer announced a £100m extension to its share buyback programme, to be completed over the next 12 months. That follows an 8 per cent hike in the regular interim dividend.

IC TIP: Hold at 806p

The group reported a robust performance over the first six months as like-for-like sales rose 2.6 per cent, compared with a 0.1 per cent decline in the same period of 2014. That was largely driven by strong performances in North Asia, South Asia and the UK, where like-for-like sales rose 23.8 per cent, 20.7 per cent and 11 per cent, respectively, at constant currencies.

However, margins were squeezed across the board, so not all sales growth converted into profits. An inflection point in 'certificate of entitlement' prices in Singapore contributed to a 45 per cent drop in regional profits to £20.6m, although management said such pressures should ease in the second half. Elsewhere, the Russian and Greek markets proved fairly resilient, the latter managing to break even despite a 36.4 per cent contraction in the new car market.

Analysts at Numis expect pre-tax profits of £300m this year, giving EPS of 48.8p, up from £278m and 44.2p in 2014.

INCHCAPE (INCH)
ORD PRICE:806pMARKET VALUE:£3.56bn
TOUCH:805.5-807p12-MONTH HIGH:898pLOW: 590p
DIVIDEND YIELD:2.6%PE RATIO:21
NET ASSET VALUE:286p*NET CASH:£31m

Half-year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20143.3416227.16.3
20153.3815325.46.8
% change+1-6-6+8

Ex-div: 6 Aug

Payment: 4 Sep

*Includes intangible assets of £471m, or 106p a share