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Inchcape reports strong results - and Russian move

Inchcape has reported strong results which show a rise in revenue and profits – and announced its entry into the Russian market.

For the year to December 31, 2005, the international automotive retail group announced revenue up 8.9 per cent at £4.5bn (2004: £4.1m) and trading profit up 10.1 per cent at £189.4m (2004: £172.1m) in five of its six core markets.

Inchcape’s domestic operation UK Retail achieved a 41.9 per cent growth in trading profits at £29.2m (2004: £25.8m). Although like-for-like new retails sales fell, but at a lesser rate than the market. Used car sales were up 10 per cent.

UK Retail full year trading margins grew from 1.7 per cent in 2004 to 2.0 per cent in 2005.

Andre Lacroix, Inchcape plc group chief executive, said: ‘Inchcape has once again produced a set of strong results, which demonstrate the benefits of our balanced international portfolio.

‘Despite overall market conditions remaining challenging, we are well placed to deliver further growth in 2006. Our future growth will come in two ways: from strengthening Inchcape’s current businesses through a resolute focus on customer centric operational excellence and from expanding in both our existing and new markets.’

Inchcape Automotive experienced ‘another difficult year’ and a reported a loss in 2005. The focus during the year had been on ‘resolving financial inefficiencies, improving processes and strengthening management’.

Inchcape Fleet Solutions grew its fleet by 25.8 per cent on the back of new contract wins.

The group has simultaneously announced its expansion into Russia with a joint venture with the Independence Group of Companies, one of Moscow's leading independent car retailers, for the retail and service of Toyota.

#AM_ART_SPLIT# The joint venture will establish two retail and service centres in Moscow for Toyota vehicles. The retail centres, which will be newly constructed, are due to open in the second half of 2007 and are expected to become Inchcape's largest retail outlets in Europe.

Toyota is one of the most successful foreign brands in Russia with sales of around 60,000 units in 2005, and a market share of foreign brand car sales of over 10 per cent.

Russia is the largest car market in central and eastern Europe and is experiencing rapid growth in automotive sales.

The joint venture, which will be 51 per cent owned by Inchcape and 49 per cent owned by Independence, marks the group's first entry into the important growth market of Moscow, which has seen the highest growth in Russia over recent years. Moscow currently represents approximately 50 per cent of foreign brand sales in Russia.

Independence is a multi-franchise automotive retail group based in Moscow. It was established in 1992 and has become one of the leading automotive retailers over the last 14 years with 12 showrooms and six service centres in Moscow. Its current brand portfolio includes Jaguar, Land Rover, Volvo, Volkswagen, Audi, Ford and Mazda.

Lacroix said: ‘This joint venture with Independence is an important step for Inchcape in its expansion plan for Moscow and the Russian market place. It has been vital for us to find the right opportunity with the right partners, and with this joint venture we have created a strong platform from which to develop a larger presence in Russia over time.’ (Inchcape: March 6).

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