8:31 am, March 23, 2023
Inchcape notched up a 50 per cent rise in pre-tax profit in 2022, making £373m versus £249m the year before.
Its final results, released today via the London Stock Exchange, also show an 18 per cent upswing in revenue from £6.901bn to £8.133bn.
The British global automotive distributor, whose retail brands include UK used car stores Bravoauto, said its profit figure took into account the company’s withdrawal from Russia following the invasion of Ukraine.
The sale of its Russian business to management will net it some £63m in annual instalments over five years, it reported.
Its adjusted operating profit rose by 46 per cent from £281m to £411m, while its adjusted operating margin rose by a percentage point to 5.1 per cent.
Among the operational highlights of the year was its £1.3bn buyout of Latin America’s biggest independent automotive distributor Derco.
Others were contract wins with BYD in Belgium and Luxembourg, Ora in Hong Kong and Macau – both first-time relationships – and Geely in Ecuador.
Its retail segment, which only includes the UK and Poland franchise dealerships and its Bravoauto business in these markets after ‘a proactive disposal programme’, saw its adjusted operating profit rise by 34 per cent to £47.5m on a two per cent increase in revenue to £2.264bn.
The related adjusted operating margin went up by half a percentage point to 2.1 per cent.
Bravoauto launched in the UK in 2021 but is now in nine markets globally.
Inchcape said in its results for the year to December 31: ‘In Europe, growth was driven by the improvement in vehicle supply (>20% increase in new vehicle volume) coupled with robust demand.
‘This resulted in us gaining share in each of our largest markets (ie, Belgium, Greece, Romania).
‘While vehicle supply continued to improve towards the end of the year, order banks remain at record levels and will provide an underpin in 2023 as we navigate a changeable economic backdrop.’
In the results announcement, Inchcape also acknowledged that in the UK some manufacturers will be adopting the agency model for new vehicles from the start of 2023.
As a result, it estimates a reduction on reported retail revenue of some £200m, but the impact on operating profit is only expected to be negligible.
Inchcape operates in more than 40 markets across Africa, Asia, Australasia and the Pacific, Central and South America plus the Caribbean, as well as Europe, including the UK.
Group CEO Duncan Tait said today: ‘Inchcape delivered another great set of results in 2022, with strong performance across all regions.
‘Excellent operational execution from our teams, coupled with robust consumer demand following a prolonged period of supply shortages, drove growth in revenue, profit and cash.
‘Since launching our Accelerate strategy in Q4 2021, we have made substantial progress with our two strategic growth priorities: distribution excellence and vehicle lifecycle services.
‘In 2022, we have further extended our global leadership in automotive distribution through our investments in digital and data analytics, and the transformational acquisition of Derco – which significantly increased our presence in the highly attractive and fast-growing Americas region – and continued our portfolio shift towards distribution.
‘We are also making encouraging progress with our ambition to capture more of a vehicle’s lifetime value with the international expansion of Bravoauto.’
He added: ‘Inchcape is a business with great momentum and an exciting future.
‘With a clear and proven strategy, we are well positioned to capitalise on further opportunities for organic growth and market consolidation, and I am confident we will continue to deliver sustainable growth and long-term value for all our stakeholders.’
