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Inchcape reports 14.5% growth in UK revenues

Inchcape's UK operation has grown revenues by 14.5% in the first four months of the year after sustained growth in the new car market.

However the car dealer group reported a sector backdrop of continued pressure on profit margins, according to its interim management statement for the period of January 1 to April 30.

Globally, Inchcape said it has delivered broad-based revenue growth in the first four months of 2014, benefiting from, the quality of its international portfolio of operations in 26 markets, longstanding partnerships with leading premium and luxury brands, and diversified earning streams in five distinct categories.

Group revenue was £2.212bn, up by 2.5% at actual currency (up 11.4% at constant currency). Like for like revenue was up by 0.8% at actual currency (up 9.5% at constant currency).

Inchcape said its used car and aftersales activities, which represent c60% of the group’s gross profit, performed well and ahead of last year, fuelled by the growth of the 1-5 year car parc.

André Lacroix, Inchcape group chief executive, said: “Inchcape has delivered a robust trading performance in the first four months of the year. Benefiting from broad-based growth across our markets and categories, we continue to expect to deliver a robust constant currency performance in 2014.

"The group has a track record of delivering premium growth with premium returns. This is a testament to the quality of our business model, our differentiated Customer 1st strategy and strong organisational discipline underpinned by our industry leading processes, which enable our operations to transform revenue growth into sustained earnings growth and strong cash generation.

"Our partnerships with the world’s leading OEMs and the strength of our balance sheet position us both to seize attractive consolidation opportunities and make disciplined capital investment in high margin and high growth markets.”

Outside the UK, its European businesses recorded like for like growth of 15.2%, reflecting the recovery of the Greek market and the progress on market share in both our Greek and Belgian operations supported by successful new products launches.

In North Asia, it delivered "robust" revenue growth as it gained market share in the Hong Kong market and grew high margin service and parts sales. The South Asia business delivered a like for like growth of 22.8%.

In Australasia trading was in line with expectations and it continues the integration of Trivett, Australia’s leading premium and luxury automotive group, while in its Emerging Markets and Russia operations it recorded like for like growth of 8.4%.

Lacroix said: "We continue to expect the Group to deliver a robust constant currency performance in 2014. Notwithstanding the competitive pressure on vehicle margins in some of our markets, we are well positioned to take advantage of the attractive growth prospects in the premium and luxury segments across our markets.

"Industry growth trends are favourable to Inchcape as we will continue to benefit from structural growth across our categories in Emerging Markets, Hong Kong and Australasia, cyclical recovery in our UK and European operations and the important return to growth of the Singaporean market.

"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 expenditure investments.
 



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