Inchcape profit slips as higher costs outweigh revenue growth

Automotive distributor Inchcape on Thursday reported a drop in interim profits as higher expenses more than offset a slight rise in revenues.

The company reported a 3% fall in pre-tax profit to £153.7m for the six months to June 30, as cost of sales rose 3% to £4.1bn and net operating expenses increased by 5% to £464m.

These higher costs more than offset a 2% increase in revenue to £4.7bn after Asian growth was supported by market share gains and a supportive commercial vehicle market in Singapore, while European business benefited from growth in the Balkans and Baltics.

Revenues were constrained by Subaru supply constraints, a yen currency headwind in Australasia and continued currency-related supply constraints in Ethiopia, while a sharp contraction in the Chilean market added further pressure.

However, the FTSE 250-listed company said supply in Australasia normalised towards the end of the period and added that it has the securing of currency for two large second half orders in Ethiopia supports the company's full-year outlook.

Inchcape proposed an unchanged interim dividend of 8.9p per share and said it is confident of a largely flat year-on-year performance in its UK Retail business and improved Australia Retail profitability compared to 2018.

Inchcape's shares were down 1.89% at 597.50p at 1023 BST.