Inchcape doubles-up again
Inchcape plc’s 2014 annual results reveal a fifth consecutive year of double-digit earnings growth for the business.
In its annual report, Inchcape highlighted an acceleration of like-for-like sales momentum in 2014 with revenue growth of 10.1% at constant currency, along with strong underlying operating profit growth of 15.3%. The business also reported sales of £6.7bn (2013: £6.5bn) with a 25.6% (2013: 21.8%) return on capital employed.
André Lacroix, group CEO of Inchcape plc, commented, ‘Aftersales will continue to drive consistent returns for our shareholders. We have good visibility across our markets and categories and, notwithstanding an uncertain geopolitical environment in some of our markets, we expect to deliver a robust underlying constant currency performance in 2015.’
André continued, ‘A key strategic component of our strong business model is the diversity of our five revenue streams which we classify into ‘growth’ and ‘defensive’ categories. Our main growth category is New Vehicle sales and, when combined with our Finance and Insurance products, represents around 40% of Group gross profit.
‘Our ‘defensive’ categories of Used Vehicle sales, Aftersales Service and Parts now collectively account for 60% of our gross profit and the trend towards substantial growth in the global Car Parc (which is over 10 times the size of the New Car market) is driving true sustainability for these high-margin business streams.’
The organisation’s operating statement read: ‘The UK New Car market reached a 10-year high in 2014 with 2.5m units sold, 9.3% more than in 2013 as we saw a continued acceleration of the replacement cycle, a sustained high level of consumer confidence and attractive finance offers in all segments. Growth was driven by both the retail market, increasing 9.8%, supported by affordable Personal Contract Purchase (PCP) financing, and the fleet/business market that grew by 9.0%.’