Car dealer Inchape reported a rise in half-year profit as it transitioned to becoming a pure-play dealership following the sale of its UK retail arm earlier in the year.
On an adjusted basis, both pre-tax and operating profit rose seven per cent in constant currency to £226m and £299m, respectively. Revenue rose four per cent to £4.7bn.
Inchcape, the leading FTSE 250 global automotive distributor, sold its UK retail operations to the New York-listed Group 1 Automotive in a £346m deal in April.
“With the disposal of our UK Retail business, Inchcape will become a pureplay operator, focused on Automotive Distribution, which is capital light, highly cash generative, higher margin and higher returns than pure Retail businesses,” chief executive Duncan Tait said.
“This represents a significant strategic step in our journey to becoming the leading global distribution partner for our OEM partners.”
In a statement to markets, the London-listed firm said it had increased its share buyback programme to £150m on an “accelerated timetable” and reflecting cash flow performance. Interim dividends per share came in at 11.3p.
Looking ahead, Inchcape reiterated its full-year outlook. It forecast higher levels of growth in the medium term, driven by recovery across a number of markets and recent contract wins.
Tait added: “Our success in winning new Distribution contracts continued during the first half, with four contracts awarded in the period.
“These contracts, along with our investment in acquisitions, will continue to support the business as we grow in existing markets by building market share, expand into new markets and develop our OEM partner portfolio to drive growth.”