Total turnover for the group rose 8.9% to £4.48bn, while operating profit increased 10.1% to £189.4m. The UK, which accounts for more than a quarter of the group’s business, saw turnover increase from £1.33bn in 2004 to £1.53bn in 2005, and operating profit increase from £25.8m to £29.2m in the same period.
Group chief executive André Lacroix says: “Growth in the UK is a key priority for us, and our business is performing well. Growth in year-on-year revenue and profits has been considerable because we are following a clear strategy based on contiguous territories for the brands in our portfolio.”
Inchcape Retail looks to play its part in this consolidation. The group will continue its strategy of growth through the extension of existing contiguous territories and the acquisition of new market areas with its brand partners.
In April 2005, Inchcape purchased six Mercedes-Benz retail centres in the north west from the Robert Smith Group. As a result, it is the largest independent Mercedes-Benz retailer in the country. It also continues to invest in its BMW retail.
Lacroix says the group will continue to make acquisitions, provided it can identify the right opportunity in terms of brand and geography with good returns for its shareholders. He says: “My task is to develop the next phase of growth and to build on this success.”
Inchcape Fleet Solutions also performed strongly thanks to new contract wins and an increase of 28.1% in the number of vehicles under fleet management. Inchcape Automotive, its remarketing business, reported a loss in 2005, resulting in a focus on resolving production inefficiencies, improving processes and strengthening management.
A city analyst tells AM: “Overall Inchcape looks very robust. It continues to make acquisitions in a controlled manner, retains strong vehicle manufacturer relationships and has grown its F&I penetration. The importance of its international operations will also continue to grow.”
Lacroix attributes the group’s performance to being driven by its focus on process improvements, operational excellence and customer centric initiatives such as ‘Insight’.
He says: “Having the right location and the right brand is obviously important. What really creates a strategic advantage, however, is the ability to deliver an outstanding customer experience, every day, everywhere.
“I believe that organic growth will come from us becoming truly customer centric. This is one of my absolute priorities.”