Inchcape (INCH) has had a tremendous six months and, flush with cash, the global car dealership has announced a £100m share buy-back programme that could enhance EPS by 3 to 4 per cent.
Like-for-like sales grew 2 per cent and trading profit rose 7 per cent to £167m on a comparable basis, as Inchcape benefited from robust growth in new vehicle sales. Aftersales are also beginning to rise, thanks to a greater number of newer cars on the roads. Outperformance came largely from the Russia and the emerging markets segment, where strong growth in South America, Africa and China offset weaker trading in the Balkans and Russia, resulting in a 35 per increase in trading profit to £33.3m.
A strong new car market in Hong Kong boosted profit in the North Asia division, although difficult conditions in Singapore caused profits in the South Asia segment to tumble 12 per cent. Strong sales, better pricing and a weaker yen helped profits to rise 20 per cent in the Australasian business, which also benefited from the acquisition of luxury dealership Trivett in March. Cheap financing deals in the UK delivered good sales growth, and while performance declined in Europe, it was better than expected.
Broker Investec Securities expects full-year pre-tax profit of £272m and EPS of 42.2p (from £250m and 39.1p in 2012).
| INCHCAPE (INCH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 638p | MARKET VALUE: | £2.99bn | |
| TOUCH: | 637-639p | 12-MONTH HIGH: | 653p | LOW: 351p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 344p* | NET CASH: | £189m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 3.11 | 137 | 20.7 | 4.00 |
| 2013 | 3.31 | 145 | 21.2 | 5.70 |
| % change | +6 | +6 | +2 | +43 |
Ex-div: 14 Aug Payment: 12 Sep *Includes intangible assets of £603m, or 129p a share | ||||
