Shares of U.K.-based car dealer Inchcape experienced a 12% surge to GBP8.75 following the release of its first-half earnings report. The company’s revenue and pretax profit from continuing operations showed a positive year-on-year growth. Moreover, Inchcape provided optimistic guidance, stating that its full-year results are anticipated to exceed market expectations.
Financial Performance Highlights
For the six-month period ending in June, Inchcape achieved a pretax profit of 204 million pounds, a notable increase from the previous year’s GBP188 million. This growth can be attributed to a significant 45% rise in revenue, which reached GBP5.63 billion. Boosting the revenue figure was Inchcape’s Latin American subsidiary Derco. Despite a slight 10% decrease in free cash flow to GBP202 million, the company managed to report an adjusted pretax profit of GBP249 million.
Revenue Growth and Strong Performance in Distribution Business
Inchcape’s distribution business, which represents a significant portion of overall revenue, exhibited impressive performance during the assessed period. The company recorded organic revenue growth of 17%, contributing to its overall success. The Americas region performed particularly well, demonstrating robust business operations. However, certain European markets continue to exhibit weak consumer demand.
Positive Outlook for Full-Year 2023 Results
Taking into account the prevailing market conditions, Inchcape expressed confidence that its full-year 2023 results will surpass the market consensus. While challenges persist in certain European markets, the company remains optimistic about its future prospects.
