Inchcape defies UK fears with strong international growth

Motor dealer and distributor Inchcape continued to growth sales at double digit rates in the third quarter, which reassured investors spooked by a warning from UK-focused rival Pendragon earlier in the week.

But for Inchcape, more internationally focused and with an emphasis on distribution, group revenue of £2.3bn in the three months to September was up 14.6% on the same period last year at actual exchange rates and +11.3% at constant currencies.

Excluding Inchcape's South America acquisition, sales advanced 6.3% at constant currency rates, while distribution revenue grew 21.4% and retail revenue 3.6%.

UK & European growth was weakest at 1.8%, but Australasia grew revenues 13.2%, Asia by 5.8% and the emerging markets segment by 69%, or 17.5% if excluding the South American acquisition.

Management said that, with results in-line with expectations, it continue to expect to deliver "solid" profit growth at constant currency rates.

Chief executive Stefan Bomhard said growth in all regions and the benefit from the South America distribution acquisition "demonstrates the advantages of our global diversification and distribution-focused business model".

"With distribution the core part of our business and the structurally attractive emerging markets growing in the mix, the group has been able to deliver a strong revenue performance over the quarter despite continued margin pressures in some retail markets.

"Within our distribution business Singapore in particular was a good performer, driven by strength in commercial vehicles, and growth was further boosted by the contribution from our South America acquisition."

On strategic developments, he said momentum was "continuing to build" and on long-term growth potential he was "excited".