International dealer group Inchcape said this morning that, despite pressure on margins it is confident it will outperform the market - and remains committed to what it calls its top five priorities.
Its interim results for the quarter between July 1 to October 22 show revenue for all its operations in the third quarter was £1.697 billion, up 10.6% at constant currency (up by 4.4% at actual currency) compared to the same period last year. Like for like revenue was up 11.6% at constant currency (up by 6.0% at actual currency).
Total revenue for the first nine months to September 2014 was £5.033bn, up 9.6% at constant currency (up 1.9% at actual currency) compared to the same period last year. Like for like revenue increased 9.4% at constant currency (up by 1.9% at actual currency).
André Lacroix, group chief executive, said: “Our growth momentum continues and we are on track to deliver a strong underlying constant currency performance in 2014. This is testament to the strengths of the Inchcape business model, our differentiated Customer 1st strategy and our operational excellence enabled by industry leading processes.
"The group has a track record of delivering sustained earnings growth with strong cash generation. We believe that our focus on premium growth will continue to deliver premium returns for our shareholders, as we will continue to benefit from exciting growth prospects moving forward.
"Our partnerships with the world’s leading brands in the premium and luxury segments and the strength of our balance sheet, position us both to seize attractive consolidation opportunities and make disciplined capital investments in high margin and high growth markets.”
Its used car and aftersales activities, which represent circa 60% of the group gross profit, delivered a "robust" performance, fuelled by the growth of the one-five year car parc in the majority of its 26 markets.
In the UK, performance was "strong" with like-for-like revenue growth of 11.8%. Inchape continues to "benefit from sustained growth in the new car market reflecting the strength of our brand portfolio in the premium and luxury segments".
In Europe the group delivered a "solid performance reflecting the successful launch of new products and the recovery of the new car market in Greece".
Inchcape said it expects to end the year with a net cash balance of about £200 millio, before taking account of the share buyback announced on July 31.
It started a £100m share buyback program on August 4 and to date it has purchased 4.1m shares at an average price of 662p for a total consideration of £27.1m.
For 2014 as a whole Inchcape said it expects to deliver a "strong underlying constant currency performance".
"Notwithstanding the competitive pressure on vehicle margin in some of our markets, we are well positioned to take advantage of the attractive growth prospects in the premium and luxury segments and continue to outperform the industry.
These exciting growth prospects reflect the unique strengths of Inchcape’s geographic portfolio as our markets benefit from strong economic fundamentals and industry growth drivers distinct to our regions.
"The group remains firmly committed to its top five priorities of growing market share, growing aftersales, improving margin, controlling working capital and being selective about capital investments".
> Inchcape announced the resignation of Lacroix in September. He is to become chief executive of Intertek Group. He will leave Inchcape, after nearly 10 years as CEO in March.