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Inchcape boosted by emerging markets, forex and acquisition as Brexit dampens new car demand in UK

Chief executive Stefan Bomhard said: "The group has been able to deliver a strong revenue performance over the quarter despite continued margin pressures in some retail markets”
Domestic industry data shows a fifth month of decline for UK new car demand

Inchcape Plc (LON:INCH) has revealed a 14% increase in revenue for the three months ended September 30, with the figures boosted by foreign exchange and a recent acquisition in South America.

Sales stood up well with revenue up 9% even excluding the South American business.

READ: Inchcape reports a solid increase in revenues, unveils expansion in Estonia

The distribution business,in which Inchcape covers the whole supply chain in smaller markets on behalf of manufactures, significantly outperformed with a 21% rise in revenue while revenue at its retail business was up 3.6%.

Inchscape’s trading update comes in the wake of monthly data showing a drop in UK based car production and a 14% fall in demand within the domestic market, with the finger of blame pointed at Brexit.

"With UK car manufacturing falling for a fifth month this year, it's clear that declining consumer and business confidence is affecting domestic demand and hence production volumes," said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.

Inchscape, a distinctly international business, paints a more positive view for the broader new car sales market.

READ: Inchcape jumps 5% as French broker Exane BNP Paribas returns rating to 'outperform'

Stefan Bomhard, Inchscape chief executive, today said: “The strength of these results demonstrates the advantages of our global diversification and distribution-focused business model.

“With distribution the core part of our business and the structurally attractive emerging markets growing in the mix, the group has been able to deliver a strong revenue performance over the quarter despite continued margin pressures in some retail markets.”

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