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Post-Brexit sterling weakness gives boost to 2016 profits for international car dealer inchcape

The group – which has dealerships in over two dozen countries - posted pre-exceptional profits before tax of £349.4mln for the year to December 31, up from £312.1mln in 2015.
Mini car
Inchcape’s revenues rose by 14.7% to £7.8bn, helped by the roughly 15% drop in the pound since last June’s Brexit vote

Sterling’s post-Brexit weakness helped international car dealership firm Inchcape PLC (LON:INCH) report a 12% jump in underlying profits, as most of its sales came from abroad.

The FTSE 250-listed group – which has dealerships in over two dozen countries - posted pre-exceptional profits before tax of £349.4mln for the year to December 31, up from £312.1mln in 2015.

Inchcape’s revenues rose by 14.7% to £7.8bn, up from £6.8bn a year earlier, helped by the roughly 15% drop in the pound since last June’s Brexit vote.

Stefan Bomhard, Inchcape’s group CEO, said: “I believe our 2016 results demonstrate the strength of our business model as we sustained our track record of growth, converting a robust revenue performance into earnings growth and strong free cash flow.”

He added: “I am pleased with the progress we have made across all five elements of our Ignite strategy. More specifically, we achieved good growth in profits from Used Vehicles and Aftersales, reflecting our focus to deliver the full potential of all revenue streams.”

“Looking forward,” Bomhard said, “we are well positioned to continue to leverage our global scale, drive growth from the installed base of vehicles and benefit from our positions across a unique spread of markets.

“More specifically for 2017, although we anticipate a continuation of the transactional currency headwind for our Australasia region and a slower New Vehicle trend in some markets, we expect to deliver a resilient constant currency performance.”

Inchcape hiked its final dividend by 13.9% to 23.8p, up from the 20.9p paid a year earlier.

In mid morning trading, Inchcape shares were up 1.2%, or 9.0p at 759.5p.

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