7th Nov 2019 10:15
(Alliance News) - Inchcape PLC on Thursday said it is "pleased" with performance in the third-quarter and kept 2019 guidance unchanged.
In addition, the London-headquartered company said it has agreed to acquire Autolider, a distributor of Daimler AG brands, for GBP47 million.
Autolider is the distributor of Mercedes-Benz passenger and commercial vehicles in both Uruguay and Ecuador. Autolider is also the distributor of German firm Daimler's Freightliner and Fuso brands in Uruguay.
Inchcape said, through the Autolider acquisition, it will enter Ecuador and Uruguay, which are adjacent to its existing markets.
Completion is expected in the final quarter of 2019 and will therefore will contribute minimal profit to 2019, the company noted.
"This transaction represents a significant milestone in the development of our core higher margin, capital light Distribution business utilising some of the proceeds realised through recent Retail-only disposals in Australia, China and the UK. We are strengthening our presence in a region with attractive growth prospects and further value creation opportunities," said Chief Executive Stefan Bomhard.
Turning to trading, the automotive distributor and retailer reported "good" revenue growth in the three months to the end of September to GBP2.4 billion, up 5% in actual currency and 3% in constant currency.
On a divisional basis, the Distribution unit experienced a "small" revenue decline in Asia, with a weaker Singapore commercial vehicle market and an impact from Hong Kong protests.
In Australasia, revenue performance improved on the first half, Inchcape noted, but the market remained "weak". The company said strong momentum across Europe was supported by market growth and market share gains.
In Emerging Markets, Inchcape said it experienced an improved profit momentum in Ethiopia, reflecting currency availability.
Turning to Retail, the unit saw "stable" losses in Australasia year-on-year, with the disposal of the majority of operations due to be completed in the fourth quarter of 2019.
In the UK, Inchcape highlighted the new car market remains challenging.
Looking ahead, the company maintained annual profit forecasts, with supply normalisation driving improvement compared to the first half of 2019.
"I am pleased with the significant strategic progress we have made over the last three months. We have streamlined our business around our Distribution core, by releasing significant value from Retail-only businesses," said Bomhard.
He added: "We are tracking in line with full year profit expectations despite some unanticipated headwinds in our markets, demonstrating the resilience of our Distribution business model."
Inchcape shares were trading flat in London on Thursday at 640.00 pence each.
By Evelina Grecenko; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Inchcape