Inchcape PLC on Thursday said it returned to an annual profit thanks to improved margins and strong consumer demand.
Inchcape shares were down 6.6% to 777.50 pence each in London on Thursday, amid a sharply lower broader market.
The London-based auto distributor and retailer posted pretax profit of £194.8 million in 2021, returning from a £129.6 million loss a year before. Revenue increased 12% to £7.64 billion from £6.84 billion.
‘Inchcape delivered a strong set of FY21 results, with improved performance across all regions. The combination of robust consumer demand and excellent operational execution, against the backdrop of supply shortages, drove our top-line recovery and higher margins, enabling profits to rebound to pre-pandemic levels,’ said Chief Executive Duncan Tait.
Inchcape’s operating margin improved to 4.3% from 2.4%.
A final dividend of 16.1 pence was declared, bringing the total payout for the year to 22.5p, dwarfing from the sole 6.9p dividend of 2020. Additionally, the company announced a £100 million share buyback which will run over the next 12 months.
Looking ahead, Inchcape said: ‘Our 2022 performance to date has seen a continuation of the trends experienced last year, although there is ongoing uncertainty relating to vehicle supply and the impact of the pandemic. We expect the group to continue to make good progress with its strategic priorities in 2022. The strength of our business model and financial position means Inchcape is well placed to continue to grow profits and generate cash, and we are confident in the medium-term outlook.’
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