11th Mar 2014 13:59
LONDON (Alliance News) - Inchcape PLC said Tuesday revenue and pretax profit grew steadily during the full-year, boosted in part by an Australian acquisition, strong revenue performances and effective cost controls, leading the firm to increase its dividend by 20%.
The multinational automotive retail and services company saw its shares rise to lead the FTSE 250 in early trading after reporting a jump in pretax profit to GBP266.1 million for the year, up 7.4% from GBP247.7 million in 2012. Revenues were up 7.7% to GBP6.5 billion, up from GBP6.1 billion the comparable year.
The company also boosted its final dividend to 11.7 pence per share, resulting in a total dividend for 2013 of 17.4 pence per share, up 20% on the 14.5 pence per share paid last year.
André Lacroix, Group CEO of Inchcape, said, "2013 marks the fourth consecutive year of double-digit EPS growth and return on capital of over 20%. This is testament to the Inchcape business model. We operate in the right international markets with the right premium and luxury brands and generate diversified profit streams from the right categories."
For the year to December 31, 2013, Inchcape said its group sales benefited from its GBP76 million acquisition of Trivett, an Australian luxury and premium automotive group, and notes that like-for-like sales growth and profit growth was achieved in most of its geographical segments.
The firm said of the acquisition, "[It was] was an important step in the development of our operations in Australasia, positioning us with greater scale with premium and luxury brands represented in high quality retail centres in Sydney and Melbourne."
On a divisional basis, Inchcape said its Emerging Markets business was growing well, noting that in Chile and Peru, where it is the distributor for BMW, the luxury car market grew by 28% and 22%, respectively. The firm said it saw strong revenue performance in the UK, Emerging Markets and North Asia, and delivered revenue growth in all segments except Europe and South Asia. Like for like sales increased by 3.0%, said the company.
The Distribution business grew year-on-year by 1.5% to GBP2.5 billion in terms of sales and by 14.1% to GBP219.4 million in trading profit.
As well as recording strong like-for-like growth in sales, Inchcape said it continued to focus on margin expansion and exercised disciplined cost control, enabling the Group to achieve an increase of 10.3% in trading profit to GBP305.8 million.
The firm also notes that sales in its Retail operations increased by 12.0% to GBP4.0 billion, driven by the acquisition of Trivett and an 8.7% like-for-like performance in the UK. Trading profit increased by 1.6%.
The UK New car market reached a five-year high, said Inchcape, reporting that headline sales in its UK Retail business grew by 4.1%l, with robust like-for-like sales up 8.7% - after the disposal of the Ford sites in February 2013.
"2013 has been another strong year for Inchcape, marking a record profit and a return to peak operating margin performance. The strength of our premium operations, our focus on Asia Pacific and Emerging Markets, our dedication to our Customer 1st strategy and the passion of our colleagues have enabled Inchcape to achieve these record results," said Chairman Ken Hanna.
Looking ahead, the firm said it expects the market will return to growth in 2014, "driven by the fact that we have now seen an increase in de-registrations year on year for 16 consecutive months."
"The growth prospects are truly exciting for our Singapore business and we are well positioned, given our strong brand portfolio and our excellent service reputation, to take advantage of the start of market recovery as of 2014. We expect to deliver a strong performance in South Asia in 2014," said Inchcape.
After leading the FTSE 250 for much of morning trading, shares in Inchcape were trading up 3.74% at 638.00 pence per share early afternoon Tuesday, the fourth biggest gainer on the index.
By Alice Attwood; [email protected]; @AliceAtAlliance
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