Continued pressure on the UK car industry is hurting the retail division at motor group Inchcape (INCH). Trading profits from that segment fell by nearly two-thirds during the first half of the financial year, although that fails to tell the whole story. Trading profits from the distribution segment – often overlooked despite the fact that it accounts for close to 90 per cent of group profits – actually grew by a steady 13 per cent, or 21 per cent at constant currencies. After-sales gross profits also grew by 7 per cent at constant exchange rates, which helped minimise damage at the group level to a modest 3 per cent drop in pre-tax profits before exceptional costs.
Geographically, while the UK and Australia remain weak, the group clocked a strong performance in Asia. At constant currency, sales there rose by 2.6 per cent, margins expanded and trading profit grew by more than a fifth to £85.8m. But, despite the variance in the group’s performance across its global markets, full-year profit guidance remains unchanged. Analysts at Deutsche Bank expect pre-tax profits of £383m for 2018, giving EPS of 65.7p, compared with £370m and 66.2p in 2017.
| INCHCAPE (INCH) | ||||
| ORD PRICE: | 798.5p | MARKET VALUE: | £3.31bn | |
| TOUCH: | 797.5-798.5p | 12-MONTH HIGH: | 885p | LOW: 661p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 360p* | NET DEBT: | 11% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 4.44 | 191 | 32.8 | 7.9 |
| 2018 | 4.61 | 161 | 26.9 | 8.9 |
| % change | +4 | -16 | -18 | +13 |
| Ex-div: | 02 Aug | |||
| Payment: | 05 Sep | |||
| *Includes intangle assets of £772m, or 186p a share | ||||
