23rd Mar 2023 15:48
(Alliance News) - Inchcape PLC shares remain "great value" analysts said on Thursday, as the company reported that profit more than doubled in 2022.
The London-based automotive distributor said pretax profit jumped to GBP399.7 million in 2022 from GBP181.3 million in 2021, while revenue from continuing operations climbed 18% to GBP8.13 billion from GBP6.90 billion.
Inchcape said revenue was driven by growth in both Distribution and Retail segments. In the Americas region, revenue was GBP1.45 billion, up 60% from GBP926.2 million a year earlier, while in the Europe & Africa region, revenue grew by 28% to GBP2.05 billion from GBP1.60 billion in 2021. In the Asia-Pacific region, revenue was up 8.8% to GBP2.34 billion from GBP2.15 billion.
Analysts from Peel Hunt and Jefferies noted that revenue and pretax profit were in line with the company's expectations, which it had increased over the course of 2022.
Looking forward, Inchape said it expects that new vehicle supply will continue to improve throughout 2023, and support a normalisation of order books. It added that trading to date in 2023 has been in-line with its expectations.
Jefferies analysts James Wheatcroft and Darragh O'Sullivan said they do not expect a material change in the pretax profit consensus for 2023, despite Inchcape's description of its outlook as "changeable".
Meanwhile, Peel Hunt analyst Andrew Nussey said the company's outlook is confident, with order books remaining at elevated levels, adding that Peel Hunt expects to pretax maintain its 2023 adjusted pretax profit expectation from December, of GBP484 million, compared to the market consensus of GBP489 million. The company reported adjusted pretax profit in 2022 of GBP373 million.
Chief Executive Officer Duncan Tait said: "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."
The firm proposed a final dividend of 21.3 pence, which would bring its full-year payout to 28.8p, up 28% from 22.5p a year prior.
Both Peel Hunt and Jefferies rate Inchcape at 'buy'. The current share price offers "great value in our view," Peel Hunt's Nussey commented.
Inchacpe shares fell 12% to 767.00 pence each in London on Thursday afternoon.
By Harvey Dorset, Alliance News reporter
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