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Inchcape profits up 22%

Inchcape has released ‘outstanding’ results for the half year to the end of June.

The highlights include a rise in pre-tax profit of 21.6% to £100.1m leading the company to issue a confident prediction on the rest of the financial year in the face of a falling market.

Peter Johnson, group chief executive, said: "We are delighted to report a further set of outstanding results, showing year on year growth with profit before tax up 21.6%. This continues the trend of reporting an increase in profit at every set of interims since we became a pure automotive services group.

"Critical to our success is our geographic spread, which remains an important factor in the quality and consistency of our earnings. We have increased the dividend and continue to return excess cash to shareholders through the share buy back programme, whilst further investing in our businesses.

"Our cash generative qualities and strong cash position leave us with the financial capacity to take advantage of further investment opportunities. Against this positive background, we are confident that 2005 will represent a further year of progress."

Inchcape also reported operating profit up 20.9% at £104.1m and basic earnings per share up 25.0% at 99.0p.

Trading profit for 2005 was £15m (2004: £13.9m). UK Retail showed ‘encouraging like-for-like profit growth (£13.8m up from £11.3m in 2004) in a declining market’ with ongoing expansion and development. Used car sales are up 6.8%.

"This more than compensates for the weaker new unit sales, which have declined, but at a slower rate than the market," Johnson said.

Inchcape Fleet Solutions performed ‘well’.

It continued to develop its fleet management operations and benefited from lower overheads. As a result trading profits are up 13.0%.

On the future, Inchcape has identified opportunities for growth in retail.

"We already have examples of world class retail performance in a number of our markets. However, we are recruiting more people internationally with retail skills to further support our expansion plans. We are also undertaking long term initiatives, such as our Retail Academy in the UK developed in conjunction with Loughborough University, which will improve the retail skills of our managers across franchises and countries. All this gives the Board confidence that Inchcape remains well placed to deliver on its strategic growth plans," Johnson said.

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