Inchcape results ahead of expectations

Inchcape plc (LON:INCH), the leading independent global automotive distributor, today released its Q1 Trading Update covering the period from 1st January to 31st March 2021.

·    Group revenue £1.9bn: up 2% on an organic basis, and down 3% reported

·    Continued expansion of our distribution footprint: JLR in Indonesia and Daimler in Guatemala

·    Sale of retail operations in St.Petersburg (Russia); expected completion in Q2

Q1 Revenue YoY%% changereported% changeconstant FX% changeorganic1
Group(3)%(1)%+2%
Distribution+10%+9%+4%
Retail(18)%(14)%(2)%

1: Organic growth is defined as sales growth in operations that have been open for at least a year at constant foreign exchange rates

Duncan Tait, Inchcape Group CEO, commented:

“Our first quarter results were ahead of our expectations. The performance demonstrates the underlying resilience of the Group – with revenue growth underpinned by a widespread recovery in our Distribution business. It also reflects our agility as we met the challenges of lockdowns and restrictions worldwide by adapting and improving our operational capabilities.

In line with our focus on markets with high growth potential, we continued to expand our distribution footprint with JLR in Indonesia and Daimler in Guatemala. We have also agreed the sale of part of our retail operations in Russia, further streamlining our Retail-only business.

Looking ahead, while the pandemic situation presents continued uncertainty, absent any severe disruptions we continue to expect material growth in profits and an improved operating margin for FY21.

Our ambition is to become the undisputed distributor of choice for OEMs. We will achieve this by further strengthening our OEM relationships and with more emphasis on capturing the lifetime value of both customers and vehicles.”
 

Channel review

The commentary that follows covers the period from 1 January to 31 March 2021.  Unless otherwise stated, all figures are quoted on an organic basis1.

During the quarter, Group revenue increased 2% year-on-year, with Distribution up 4% and Retail down 2%. In March, the business started to annualise restrictions which weighed on the comparative period. While performance in Distribution improved versus Q4, Retail was impacted by stricter pandemic related restrictions.

In Distribution, top-line performance improved sequentially across most regions, with Asia, Australasia, Europe and the Americas all delivering positive year-on-year revenue growth. During the period, a number of our markets continued to be impacted by restrictions.

In Retail, a solid revenue performance in Russia was offset by the UK, which faced severe restrictions with showrooms being closed throughout Q1 although the business continued to operate online and perform Aftersales services.

DistributionQ1 organic revenue YoY%: +4%

Asia

·    Hong Kong saw positive revenue growth throughout the quarter

·    Singapore experienced a sequentially improving top-line trend during Q1

Australasia

·    Australia benefited from new model launches (e.g. Subaru Outback) and an encouraging market share outturn

Europe

·    Successfully navigating Covid disruption with the region delivering positive growth in the quarter

Americas & Africa

·    In Americas, the topline trend improved across all major markets; some tightening of restrictions late in the quarter

·    Our businesses in Africa performed well in the context of a high prior year comparator

RetailQ1 organic revenue YoY%: (2)%

UK & Europe

·    Relative resilience in the UK against the backdrop of severe restrictions; solid start to the year in Russia

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