Delivering against strategy, share buyback programme increased to £250m, expecting EPS growth of >10% in FY 2026
Duncan Tait, Group Chief Executive, commented:
“Inchcape continued to deliver on our Accelerate+ strategy during the first half of 2026, supported by our diversified and scaled market and brand portfolio, with our volume growth of 9% driven by distribution contracts won in recent years. We also made meaningful strategic progress, winning five new distribution contracts so far this year and completing a value-accretive acquisition in Bulgaria. We delivered positive momentum in the Americas, with supportive market conditions, and continued outperformance in Europe & Africa. In APAC, we saw a stabilising position in Asia, while our market share in Australia was weaker. We are making good progress on our management actions in APAC, with a focus on cost reduction, enhanced collaboration with our OEM partners and portfolio optimisation, including exiting 13 immaterial and dilutive contracts across the region.
“Looking ahead, we expect to deliver a year of strong adjusted EPS growth in FY 2026, reflecting currency tailwinds and value-accretive M&A, with a stable performance, on a constant currency basis. As previously guided, our performance will be weighted to the second half due to the usual seasonality in the Americas and improved product availability and mix, as well as the benefits of management actions, in APAC. These factors support our updated view of higher levels of organic volume growth and FCF generation for the year. With our financial performance for the year in mind, and supported by our current share buyback programme, increased to £250m today, we remain confident in growing adjusted EPS by >10% this year, in line with our medium term guidance.”
Good progress amid evolving market backdrop:
- Inchcape volumes1 up 9%, driven by contract wins, with TIV2 in Inchcape markets up 8%
- Organic revenue growth3 of 5%; reported revenue growth of 9%, up 7% at constant currency4, to £4.7bn, driven by supportive market conditions and contribution from contracts won in recent years
- Adjusted operating profit1 of £248m down (2)% in constant currency and adjusted operating margins4 down (40)bps to 5.3%, driven by headwinds in APAC, particularly Australia, partly offset by margin expansion in the Americas and Europe & Africa
- Adjusted PBT4 down (6)% to £188m, due to higher finance costs. Statutory PBT down (33)% to £124m, reflecting £64m of adjusting items, primarily relating to restructuring costs, mainly in APAC
- Five distribution contract wins so far this year and continued growth from existing contract base, exiting 15 immaterial, dilutive contracts across the Group (these contracts represent new vehicle volumes of c.5,000 in FY 2025, equivalent to c.1.5% of the Group's total new vehicle volumes)
Performance reflects Inchcape’s diversified and scaled market and brand portfolio:
- Americas - organic revenue growth3 of 13%, adjusted operating margins4 of 6.5% (up 60 basis points at constant currency4) - continued positive momentum, with supportive conditions
- APAC - organic revenue decline3 of (7)%, adjusted operating margins4 of 3.5% (down (320) basis points at constant currency4) - stabilising position in Asia, weak Australia. Good progress in implementing management actions to reduce costs, optimise our contract portfolio and enhance OEM collaboration, with margin benefits expected to come through in H2
- Europe & Africa - organic revenue growth3 of 7%, adjusted operating margins4 of 5.1% (up 20 basis points at constant currency4) - underlying market outperformance, growth from contracts and acquisitions
- Some short term supply disruption in the Americas and Europe & Africa, related to Middle East situation
Strong balance sheet and free cash flow performance supports our disciplined approach to capital allocation:
- Leverage4 of 0.5x net debt / EBITDA; FCF conversion4 of 65% to PAT during the period; FCF4 of £84m and ROCE4 of 31%
- Completion of acquisition of Silver Star, Mercedes Benz distributor in Bulgaria, with continued focus on M&A
- Today announcing £75m increase to current share buyback programme to £250m
- Interim DPS of 10.8p, up 14%
Guidance for FY 2026 - a year of strong adjusted EPS4 growth expected:
- Adjusted EPS4 growth of >10%, in line with medium term guidance, driven by:
- Organic volume growth3 at top end of 3% - 5% guidance range
- Adjusted operating margins4 of c.6%, supported by scale and cost discipline
- Free cashflow conversion4 of >100%
- Disciplined approach to capital allocation, including increased share buyback and recent value-accretive acquisitions
- A year of growth, supported by Inchcape's diversified portfolio:
- Reflecting translational currency tailwinds (at prevailing exchange rates) and value-accretive M&A
- A stable performance, at constant currency, with positive momentum in Americas and Europe & Africa, Asia stabilising, offsetting a weak Australia
- H2-weighted performance in FY 2026:
- New vehicle volumes expected to increase c.20k in H2, from c.180k in H1 2026 – similar volume step-up in H2 2025
- Americas - usual H2-weighted seasonality
- APAC - volumes & margins supported by improved product availability and mix, with margin benefits from management actions
- Europe & Africa - stable H2 performance, compared to H1