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Inchcape full-year profit drops as sales hit by stricter emissions rules, challenging retail market

The FTSE 250-listed company reported a 2.6% fall in pre-exceptional pre-tax profit on a constant currency basis to £356.8mln for the year ended 31 December 2018
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Inchcape saw its full-year reported revenue rise 5.8% on a constant currency basis to £9.277bn, up from £8.953bn a year earlier

Inchcape PLC (LON:INCH) saw its full-year profit drop as the international car dealership chain saw sales hit by stricter emissions rules and a challenging retail market.

The FTSE 250-listed company reported a 2.6% fall in pre-exceptional pre-tax profit on a constant currency basis to £356.8mln for the year ended 31 December 2018, down from £381.6mln a year earlier as its operating margin declined to 4.2% from 4.5% in 2017.

READ: Inchcape third-quarter revenue flat, with rise in car distribution revenue balanced by fall in retail revenue

The firm saw its full-year reported revenue rise 5.8% on a constant currency basis to £9.277bn, up from £8.953bn a year earlier.

Inchcape also reported good free cash flow conversion, generating £281mln, compared to £314mln in 2017.

Stefan Bomhard, Inchcape’s group CEO commented: “Margins in our Retail channel came under further pressure due to the continued UK market supply and demand imbalance, the incremental impact of the new Worldwide Harmonised Light Vehicle Testing Procedure (WLTP) regulation, and a slowing Australia market.”

He added: “Given the continuation of the market trends that we discussed at the Q3 trading update, we expect a resilient performance in 2019 before the impact of a meaningful transactional currency headwind.”

The group maintained its total dividend at 26.8p per share for 2018.

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