Increased turnover and profits at mid-year point are evidence that Inchcape Retail is continuing to successfully buck the UK’s declining new car market.

The AM100 dealer group has increased operating profit before exceptional items to £13.8m against £11.3m in the corresponding period last year.

Operating profit before exceptionals for Inchcape’s entire UK operation totals £15m from £744.1m turnover. That compares to £13.9m operating profit from £683.5m turnover in the first half of 2004.

Its interim statement reports that it is experiencing weaker new car sales, although these have declined at a slower rate than the UK as a whole. Nevertheless, Inchcape Retail has benefited from improved processes driving growth of almost 7% in its used car sales, plus added profitability from finance, insurance and service business. It also established the Inchcape Retail Academy, in conjunction with Loughborough University, in April.

“The positive start to the year by Inchcape Retail is expected to continue,” says chairman Sir John Egan.

The board’s plan for the UK is to continue building contiguous regions for its chosen manufacturers. The £18m acquisition of Robert Smith Group in April added to its Mercedes outlets in the midlands and established Inchcape Retail as the UK’s largest Mercedes-Benz retailer, achieving 8% of the brand’s national sales.

The dealer group is also working to dominate a patch south of London for BMW. New facilities for the franchise are under construction in Croydon and Tunbridge Wells, while a Cobham site is being refurbished.

“We have recently introduced common systems for all the BMW dealerships, which allow management to run it as a single business,” adds Egan. Its Brooklands pre-delivery centre is also seeing an increase in aftersales business.

Next month will mark the arrival of former EuroDisney CEO and Burger King president Andre Lacroix as group chief executive designate. He will take over from Peter Johnson in January, when Johnson becomes non-executive chairman on Egan’s retirement.

The group is still seeking a group finance director to replace Alan Ferguson, who is leaving Inchcape next month to join FTSE 100 company BOC.