THE global automotive retailer and distributor Inchcape published its financial results for 2019 today – and the numbers ‘demonstrate the resilience in its business model,’ according to outgoing CEO Stefan Bomhard.
The company reported profit before tax of £402m, up a hefty 256 per cent year-on-year, although the figure was enhanced because in 2019 it sold off parts of its business, and in the previous year had to fork out for ‘impairment charges’.
The company’s ‘pre-exceptional’ profit before tax was down 7.4 per cent, and stood at at £326.3m.
Other key performance indicators included the fact that 2019 revenue stood at £9.4bn (2018: £9.3bn) and Inchcape’s operating margin was four per cent (2018: 4.3 per cent).
Revenue for the UK and Europe arm of its business stood at £1,329.6m (2018: £1,145.5m) with trading profit at £43.7m, representing a margin of 3.3 per cent (2018: £34.7m, three per cent).
Looking at the retail arm of the business, the company stated: ‘UK and Europe revenue declined 1.6 per cent year-on-year and trading profit declined 0.6 per cent on a small base.
‘The stabilisation of profit was pleasing considering the declines experienced over 2018 and amidst continuing UK market pressures. The UK [new car] market was down two per cent over the year, with diesel decreasing by a further 22 per cent leading to a continued oversupply of new car product.
‘An improved opening inventory position at the start of the year, a focus on driving all value drivers and a focus on costs helped to stabilise performance.’
Stefan Bomhard said: ‘Inchcape has a unique business model; we are the only independent automotive distributor and retailer with global scale.
‘The heart of our business, and our core set of competencies, is in automotive distribution, that is the management of the post-factory value chain for our vehicle manufacturer or OEM partners.
‘The distribution model allows us to capture a greater portion of the value chain and drive higher margins and returns. Within that value chain we also operate as a retailer, giving us true insight into our customers and allowing us to develop world-class customer experience solutions that are globally scalable.’
Inchcape’s UK business encompasses more than 100 dealerships spread across the UK from Sunderland in the north down to Exeter in the south-west. Inchcape UK employs around 5,500 staff.