Inchcape offsets weak UK performance with solid growth in emerging markets

Automotive distributor and retailer Inchcape has seen revenues come in just shy of £3bn in the year-to-date despite declines reported in its UK and Europe divisions.

In a brief trading update on Thursday, Inchcape said its UK business still suffered from a "supply and demand imbalance, further pressuring vehicle margins", but noted that it had witnessed strong growth in Eastern Europe and the Balkans.

Group revenues picked up 2.9% year-on-year to £2.99bn at actual currency, while distribution revenue moved ahead 4.1% and retail revenue collected 1.9%.

A 31.3% improvement in Inchcape's emerging markets and Australian business units offset much of the weaker performance in the UK and Europe.

Stefan Bomhard, Inchcape's chief executive, said, "Our performance over the first four months of 2018 is reflective of the trends we had anticipated at the start of the year and follow from those seen in the latter part of 2017."

"As seen in the second half of 2017, vehicle margins remain under pressure in both the UK and Australia Retail markets," he added.

Inchcape's outlook for the year was unchanged, as the firm doubled down on its expectation of a "strong performance" across its value drivers and said, after a challenging first half for its retail unit, that comparatives would ease.

"We expect solid profit growth year-on-year on a constant currency basis, reflecting our resilient organic growth expectations and the accretion due to the Central America Distribution acquisition," the firm said.

As of 1050 BST, Inchcape shares had lost 1.29% to 729p.