12 March 2013

Retail profit margins in the UK hit record levels in 2012, according to Inchcape, as the international group announced a 4.4% rise in global turnover and pre-tax profits up 24% to £251.5m.

The group said its UK retail net return on sales was 2.8%, a 0.2% rise on the previous year.

The group said sales growth was achieved in all of its geographic segments, other than Europe which experienced a decline of 23.5% as trading conditions, particularly those in Greece, continued to be challenging.

Many of the markets delivered results ahead of expectations, including the UK retail business which saw sales grow by 3.6%.

Chief executive, Andre Lacroix, told shareholders: “The group also benefited from normalised supply conditions in Australia and Singapore in 2012 following the disruption caused by the Japanese earthquake and tsunami in March 2011.”

Over 70% of Inchcape’s trading profit is now derived from Asia Pacific and Emerging Markets and, along with the UK retail division record margin, the company recorded record profit for the year in Australasia and North Asia.

Group sales at £6.1bn were driven by strong growth in key markets such as Singapore, Hong Kong and Australia. Continued focus on growth, margins and disciplined cost control enabled the group to achieve an increase of 7.7% in trading profit to £280.1m which was at the top end of expectations.

Overheads as a percentage of sales have decreased by 0.4ppt compared to 2011 and the group trading margin was 4.6%, a 0.1% increase on the previous year when the company said margins were close to an all-time high.

Inchcape had another year of strong cash generation from operations of £249.2m and net capital expenditure of £87.3m was slightly lower than expected as some expenditure was deferred into 2013. Net cash at the end of the year was £276.2m, up by £32.7m compared to the end of 2011.

In the UK, the retail division achieved a sales of £2.1bn while Inchcape Fleet Services (IFS) recorded sales of £37.4m, also an increase of 3.6%. The retail division increased trading profit by 8.4% to £58.0m while IFS delivered a strong £7.2m trading profit, up 4.3% on 2011. The IFS trading margin increased to 19.3%.

Since the year end Inchcape announced the acquisition of Trivett Automotive Group, the leading luxury and premium automotive group in Australia. The company said this transaction represents an important step in the further development of its Asia Pacific presence.
 

Tags: 2012 financial results, Andre Lacroix, Financial results, Inchcape