Weak sterling helps INCH triple revenue growth
Companies: Inchcape plc
Automotive retailer Inchcape plc
(LSE: INCH), has released a Q3 trading update this morning, reporting
impressive revenue for the period as favourable exchange rates more than
tripled revenue growth.
Group revenue increased to £2bn, up
15% on the previous period, whilst like LFL revenue was up 14.6% and retail
revenue up 12.5%. The business has clearly benefitted from the depreciation of
sterling during the quarter, as at a constant currency level, those increases
are 4.8%, 4.3%, and 7%.
Stefan Bomhard, the CEO of Inchcape
said it was a solid quarter for revenue performance, which was consistent with
management's expectation for growth across the majority of the regions.
"Notwithstanding the adverse exchange rate between the Japanese yen and the Australian dollar and the difficult trading environment in our North Asia region, we continue to expect to deliver a resilient constant currency performance in 2016.
Our global scale enables us to leverage organic and inorganic opportunities, our operational expertise within a competitive industry and our local knowledge to deliver a differentiated customer experience."
Overseas, the firm saw reduced North
Asian and Australasia revenues (-17.7% and -0.2% respectively), whilst UK and
South Asia revenues both made significant gains (+7.3% and 16.9%). Robust
growth in the UK was supported by the increased focus on used cars, and solid
growth in aftersales.
The firm made its biggest gains in
Mainland Europe, where it saw LFL revenues increase nearly 25% as operations in
Greece, Belgium and Finland all performed well.
INCH's share price opened down nearly
3% this morning, and is down 20% for the year. Its currently trading on a
multiple of 16.17 more than double Lookers (7.76) and Vertu Motors (7.01).
