13 March 2012

International auto retailer and distributor, Inchcape, has delivered strong financial results for 2011, despite disrupted vehicle supply in the aftermath of the Japan tsunami which struck just over a year ago.

The group said it had delivered ahead of expectations in the UK and Europe as well as achieving excellent results in Asia Pacific and emerging markets.

Group sales decreased slightly by 1.0% to £5.8bn for the full year largely as a result of the temporary supply constraints from the earthquake and tsunami in Japan, combined with the challenging market conditions in Greece and the UK.

But profit before tax and exceptional items of £227.7m was 6.4% higher than 2010 and adjusted earnings per share rose by 10.9% to 35.5p. On a statutory basis, profit before tax was £203.4m, 5.9% above 2010.

The group said four of six regions in which it operates increased their underlying operating margins, with group operating margin for the year up to 4.5%. There was a 41% profit growth in Russia, delivering £20.3m operating profit and new distribution contracts won in Hong Kong (Land Rover) and Chile (Rolls-Royce).

In the UK, Inchcape Retail’s like for like total market share increased by 0.3%, with like for like sales increasing by 1.6%, primarily driven by market share gains.

Aftersales performance benefited from the roll out of customer contact centres in the Audi, Toyota, Lexus, Mercedes-Benz and Volkswagen businesses. An ongoing focus on tightly controlling operating expenses also contributed to a record trading margin performance of 2.6%, which is 0.2% up on 2010.

Inchcape Fleet Solutions delivered a strong £6.9m trading profit, up 6.2% on 2010 with a trading margin of 19.1%, 1.5% ahead of 2010 as the group benefited from increased fleet volumes and rigorous cost controls.

However, chief executive Andre Lacroix warned the UK economic outlook remains uncertain in 2012. Continued modest GDP growth, combined with higher unemployment is expected to result in a decline in retail market volumes.

Tags: 2011 financial results, Andre Lacroix, Inchcape