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UPDATE 1-Inchcape profit boosted by emerging market car demand
March 12, 2013 / 7:46 AM / in 5 years

UPDATE 1-Inchcape profit boosted by emerging market car demand

LONDON, March 12 (Reuters) - Multinational car dealer Inchcape posted a better-than-expected 10 percent rise in full-year profit, helped by strong growth in Asia and a robust performance in Britain.

The London-based firm, which sells and distributes cars for manufacturers such as Toyota, Mercedes-Benz and BMW in 26 countries, reported 2012 pretax profit of 250.3 million pounds ($373 million), up from 227.7 million pounds a year earlier, on sales 4.4 percent up at 6.1 billion pounds.

The company was expected to report an average pretax profit of 248 million pounds, according to a Thomson Reuters poll of eight analysts.

The growth rate was slightly down on last year’s 13 percent rise but the company is now close to returning to levels of profit delivered at the market peak in 2007.

The company said its recent investment in high growth and high margin areas in Asia Pacific and emerging markets, including Hong Kong, Chile and Australia, were paying off.

Its South Asia business delivered a 31.6 percent rise in vehicle sales, helped by robust premium and luxury markets, with Australian car sales up 18.2 percent.

Sales in Europe fell 23.5 percent as trading conditions, particularly those in Greece, continued to be challenging but it achieved sales grow of 3.6 percent in Britain.

European car sales slumped to a 17-year low in 2012 with only Britain bucking the trend with 5.3 percent growth, although at just over 2 million vehicles, sales were still 15 percent below 2007 levels.

The company said it was confident it would deliver further growth in 2013 given that 70 percent of its group profit now comes from Asia Pacific and emerging markets.

“Asia Pacific and emerging markets ... are underpinned by population growth, wealth creation, increasing car penetration and industry premiumisation,” said chief executive André Lacroix.

“We are confident that Inchcape will continue to produce sustainable earnings growth and strong returns for our shareholders.”

The dealer increased the total dividend for the year by 32 percent to 14.5 pence per share.

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