REG - Inchcape PLC - Final Results
04/03/2025 07:15
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RNS Number : 1871Z Inchcape PLC 04 March 2025
Inchcape plc, the leading global automotive distributor, announces its
preliminary results for the twelve months to 31 December 2024
Another year of progress; medium term target of
>10% EPS CAGR and
new £250m share buyback programme
• New Medium Term targets for FY 2025 to FY 2030, through-the-cycle:
o Free Cash Flow(2) of £2.5bn to be generated and deployed, driving >10%
EPS CAGR
o Key medium term, through-the-cycle, financial drivers
§ Organic volume CAGR of 3% to 5%
§ Resilient operating margins(2) of c.6%
§ FCF / PAT conversion(2) of c.100%
o Updated capital allocation policy - dividends, commitment to on-going
share buybacks and value-accretive acquisitions
• Strategic, operational and financial progress in FY 2024:
o Accelerate+ strategy launched - growth drivers of scale and optimise
§ Scale: 22 distribution contracts won
§ Optimise: 4 contract exits and disposal of non-core retail assets in the UK
and Americas, with net cash proceeds of £391m
o Further geographic scale and diversification
§ APAC: growth from acquisitions, resilient margins
§ Americas: improved performance in H2 2024
§ Europe & Africa: strong growth and market outperformance
o Inchcape delivered growth, at constant currency
§ Revenue to £9.3bn, up 4% in constant currency, (1)% on a reported basis
• Organic growth(2) of 2%, acquisition contribution of 2%, offset
by translational FX impact of (5)%
§ Stable gross margins and resilient adjusted operating margins(2) of 6.3%
supported by cost discipline
§ Adjusted PBT(2) up 5% in constant currency, down (5)%, including impact of
translational FX, to £444m. Statutory PBT up 10% to £414m. Statutory total
profit up 54% to £435m
§ Adjusted basic EPS(2) of 71.3p, down (7)%, due to the impact of
translational FX, offset by underlying growth and share buyback accretion of
1p. Reported basic EPS up 16% to 66.4p
• Substantially reduced leverage, disciplined approach to capital
allocation:
o Free cash flow(2) generation of £462m, with FCF:PAT(2) conversion of 151%
§ Driven by working capital improvements
o Strengthened financial position, with leverage reduced to 0.3x
o Share buyback of £150m, completed in January 2025, with c.5% of the
company's shares in issue purchased
o Full year dividend per share of 28.5p (2023: 33.9p)
• FY 2025 - expectation of continued growth and new share buyback programme
of £250m:
o In the context of new medium term targets, another year of growth expected
in FY 2025
§ Product cycles and ramp-up of new contracts skewing growth to H2 2025
o Higher EPS growth, driven by
§ Profit growth
§ New share buyback programme of £250m
Duncan Tait, Group CEO, commented:
"Inchcape delivered continued strategic, operational and financial progress in
FY 2024, with revenue and profit growth in-line with our expectations at the
start of the year. This resilient performance reflects our diversified and
scaled global market leadership position, our long-standing and valuable OEM
relationships, our high performance culture and our differentiated technology
capabilities. In FY 2024, we completed our strategic transformation, supported
by a record year of Distribution contract wins. As part of this
transformation, we rolled out an evolved strategic approach, Accelerate+, and
disposed of several non-core retail assets, which generated net cash proceeds
of £391m.
"Looking ahead, we expect to continue growing the business and, by the end of
FY 2030, we anticipate generating £2.5 billion in free cash flow. We will
deploy this free cash flow to drive shareholder returns through both on-going
share buybacks and value-accretive acquisitions, resulting in a target of
>10% EPS CAGR, through-the-cycle, underpinned by ROCE of between 25% and
30%. In FY 2025, we are guiding to another year of revenue and profit growth,
with higher EPS growth consistent with our medium-term targets. We have also
announced a £250m share buyback programme, reflecting our cash generative
business model, strong balance sheet and underlining our confidence in the
Group's long-term prospects."
2024 2023 % change % change % change
constant FX(2)
organic(1)
reported
Key financials (continuing operations)
Revenue £9,263m £9,382m (1) % +4 % +2 %
Adjusted Operating Profit(2) £584m £620m (6) % +2 %
Adjusted Operating Margin(2) 6.3 % 6.6 % (30)bps (20)bps
Adjusted Profit Before Tax(2) £444m £467m (5) % +5 %
Adjusted Basic EPS(2) 71.3p 76.3p (7) %
Dividend Per Share 28.5p 33.9p (16) %
Free Cash Flow(2) £462m £492m (6) %
Reported financials
Operating Profit (continuing operations) £562m £570m (1) %
Profit Before Tax (continuing operations) £414m £378m +10 %
Total profit for the period £435m £283m +54 %
Basic EPS (continuing operations) 66.4p 57.1p +16 %
Net cash generated from operating activities £586m £593m (1) %
1. Organic growth is defined as revenue growth in operations that have
been open for at least a year at constant foreign exchange rates. See Note 12
APMs
2. These measures are Alternative Performance Measures, see Note 12
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Results presentations
A presentation for analysts and investors will be held today, Tuesday 4(th)
March 2025, at 08:30 GMT. The presentation will be held at the London Stock
Exchange, 10 Paternoster Square, London EC4M 7LS. To register for the webcast
of the event please follow this link
(https://sparklive.lseg.com/Inchcape/events/974a2889-ab31-4e5e-868f-74a7116004df/inchcape-plc-full-year-results-2024)
, or to register for conference call access please follow this link
(https://registrations.events/direct/LON377151) . A replay of the analyst
presentation will be available via the Company's website, www.inchcape.com
(http://www.inchcape.com) later today.
Management will also be hosting a live interaction presentation for investors
on the Engage Investor platform on 7(th) March 2025, 09:00 GMT. Inchcape plc
welcomes all current shareholders and interested investor to join and
questions can be pre-submitted on the platform or at any time during the live
presentation. Investors can sign up to Engage Investor at no cost and follow
Inchcape plc from their personalised investor hub. To register for the event
please follow this link (https://www.engageinvestor.com/event/0e1abc65909d) .
Financial calendar
Ex-dividend date for 2024 full year dividend 1(st) May 2025
Record date 2(nd) May 2025
Last election date 23(rd) May 2025
Payment date 16(th) June 2025
Q1 trading update 24(th) April 2025
AGM 15(th) May 2025
2025 interim results 29(th) July 2025
Q3 trading update 23(rd) October 2025
Contacts
Inchcape plc (investor enquiries):
Rob Gurner +44 (0)7825 189 088 investors@inchcape.com
Krishma Arora
DGA Group (media enquiries):
James Melville Ross +44 (0)20 7038 7419 inchcape@dgagroup.com
James Styles
About Inchcape
Inchcape is the leading global automotive distributor, with operations across
six continents. Inchcape works with our mobility company partners in smaller,
more complex and harder-to-reach markets, which tend to be higher growth with
low motorisation rates. By combining our in-market expertise with our unique
technology and advanced data analytics, we create innovative customer
experiences that deliver outstanding performance for our partners - building
stronger automotive brands and creating sustainable growth.
Our distribution platform connects the products of mobility company partners
with customers, and our responsibilities span product planning and pricing,
import and logistics, brand and marketing to operating digital sales, managing
physical sales and aftermarket service channels. Delivering for our partners,
our customers and our people - so they can realise their ambitions in the new
world of mobility. The Group is headquartered in London and employs over
18,000 people globally.
In 2024, Inchcape hosted two "In the Driving Seat" webinar sessions to provide
investors and analysts a further understanding of the dynamics of the Group's
Distribution commercial model, Accelerate+ strategy and a deep dive on our
APAC region. A recording of these webinars and those from previous years are
available on the Inchcape website: Investor Webinars
(https://www.inchcape.com/investors/investor-events/investor-webinars/)
www.inchcape.com (http://www.inchcape.com)
Our results are stated at actual exchange rates. However, to enhance
comparability we also present year-on-year changes in revenue and adjusted
operating profit in constant currency, thereby isolating the impact of
translational exchange rate effects. Following the disposal of our UK Retail
business, all figures quoted in the 'Operational' and 'Operating and
financial' reviews are on a 'continuing operations' basis and therefore
exclude any contribution from UK Retail in the current and comparative years.
Operational review
Key performance indicators
Key financials (continuing operations) 2024 2023 % change % change % change
constant FX(2)
organic(1)
reported
Revenue £9,263m £9,382m (1) % +4 % +2 %
Adjusted Operating Profit(2) £584m £620m (6) % +2 %
Adjusted Operating Margin(2) 6.3 % 6.6 % (30)bps (20)bps
Adjusted Profit Before Tax(2) £444m £467m (5) % +5 %
Free Cash Flow(2) £462m £492m (6) %
Return on Capital Employed(2) 26.9 % 27.3 % (40)bps
1. Organic growth is defined as revenue growth in operations that have been
open for at least a year at constant foreign exchange rates, see Note 12 APMs
2. These measures are Alternative Performance Measures, see Note 12
FY 2024 results - performance review
The Group delivered a resilient financial performance in FY 2024, driven by
strong top line growth, with resilient margins supported by continued cost
discipline across the Group.
Group revenue of £9.3bn, increased by 4% in constant currency, supported by
organic growth of 2% and a contribution from acquisitions of 2%. This was
offset by translational currency headwinds of (5)%, which meant that revenues
were down (1)% on a reported basis.
The Group delivered adjusted operating profit(2) of £584m up 2% in constant
currency, offset by (8)% translational currency headwinds. Resilient adjusted
operating margins(2) of 6.3% were supported by cost discipline. Overheads were
stable, with the ratio of adjusted net operating expenses to revenue of 11.0%
during the year (2023: 11.1%). Reported operating profit was down (1)%.
Adjusted net finance costs(2) reduced to £142m (2023: £154m), driven by the
positive impact of a reduction in average net debt on net interest costs. This
was partly offset by an increase in inventory financing costs associated with
a more stable working capital profile, which resulted in an expense of £56m
(2023: £38m).
Adjusted profit before tax(2) grew 5% on a constant currency basis, offset by
(10)% translational currency headwinds. Adjusted basic EPS(2) was down (7)% to
71.3p, also driven by translational currency headwinds, as well as a higher
effective tax rate, partly offset by profit growth and the impact of the share
buyback programme, which delivered 1p EPS accretion.
During the year, pre-tax adjusting items amounted to an expense of £30m
(2023: £89m). This was primarily driven by one-off costs related to
acquisition and integration costs of £42m (2023: £50m), mainly in relation
to Derco, and non-cash, non-operational losses arising from hyperinflation
accounting relating to Ethiopia of £8m (2023: £29m). These factors were
partly offset by a gain on disposal of a non-core retail aftersales business
in the Americas of £6m (2023: nil), and non-cash, net impairment reversals of
distribution agreements of £14m (2023: nil). After adjusting items, reported
profit before tax was £414m (2023: £378m).
The highly cash-generative nature of our business model was again highlighted
during the year, with free cash flow(2) generation of £462m (2023: £492m),
representing a conversion of profit after tax of 151% (2023: 150%). This was
supported by a net working capital inflow of £195m (2023: inflow £169m)
driven by strong inventory management and a continued alignment of supplier
terms at acquired businesses. Inventory fell to £1,935m (FY 2023: £2,718m),
driven by the impact of translational FX, the disposal of the UK Retail
business, accounting for £336m of the reduction, the disposal of a non-core
retail aftersales business in the Americas of £19m and an improvement in
inventory efficiency across the Group. Net interest payments in the period
increased to £128m (2023: £118m), excluding payment for leases in both
periods, due to the timing of cash payments relating to inventory finance.
Net cash generated from operations down (1)% to £586m.
As at 31 December 2024, Group adjusted net debt(2) amounted to £190m, a
significant reduction from FY 2023 when net debt was £601m (excluding lease
liabilities). This was achieved due to a strong free cash flow performance of
£462m and net proceeds from non-core asset disposals of £391m, set against
cash outflows of £294m relating to dividends and share buybacks, and £153m
relating to FX and other items. Including lease liabilities, the Group ended
the period with net debt of £492m (FY 2023: net debt of £1,041m). Group
leverage on a proforma basis(1) was approximately 0.3x at 31 December 2024,
down from 0.8x at the end of FY 2023.
Return on capital employed(2) during the year was 27%, in line with FY 2023 on
a continuing operations basis, but higher than previous years, highlighting
the benefits of Inchcape becoming an automotive Distribution business.
Q4 2024 performance
Q4 2024 Group revenue was £2.4bn, with flat organic growth(2), offset by
currency headwinds of (6)%. This was driven by positive organic growth in the
Americas and a robust performance across the Europe & Africa region,
offset by mixed market momentum in APAC.
Strategic overview - FY 2024: a transformative year for Inchcape
In FY 2024, Inchcape consolidated its position as leading global automotive
Distributor. As a focused business, Inchcape will continue to develop its
Distribution platform in smaller scale and more complex markets.
During the year, the Group launched an evolved strategic approach,
Accelerate+, designed to help scale our organisation and optimise key elements
of our business, enabling Inchcape to drive towards our ambition of growing
towards 10% market share in our markets.
Scaling to drive market share growth
A key element of Accelerate+ is driving scale. This will enable Inchcape to
grow market share in passenger cars in both existing and new markets and
deliver growth through extending our distribution capabilities into adjacent
vehicle categories, like light commercial vehicles and premium motorcycles.
Scale will be achieved through executing and integrating value-accretive
acquisitions and by winning and embedding new Distribution contracts with our
OEM partners. Building scale will be supported by our market-leading
technology capabilities.
Acquisitions and Distribution contract wins
Inchcape operates in a fragmented independent distribution landscape, where
there are many opportunities to consolidate. Since 2019, the Group has
executed 8 acquisitions and Inchcape will remain disciplined around investing
in value-accretive bolt-on M&A opportunities.
Over the last five years, Inchcape has built up a portfolio of around 230
Distribution contracts with over 60 OEM partners. FY 2024 was a record year
for Distribution contract awards to Inchcape, with 22 won during the year.
These included Deepal, a Changan SUV brand, and Foton, a light commercial
vehicle brand, in Australia. In addition, Inchcape won 14 new contracts in the
Americas, including various Changan brands in a range of markets and Great
Wall Motors in Colombia, with 6 contract wins in Europe and Africa, including
BYD across a number of markets.
Furthermore, the 40+ Distribution contracts won between FY 2021 and FY 2024,
are expected to contribute, on an average per contract basis at maturity
(which tends to be during year 5 of a contract), of between £20m and £30m in
revenue and between £1m and £2m in adjusted operating profit, with an
anticipated increase in market share of at least 2%.
Our differentiated technology
As a result of our on-going investment, Inchcape has developed a
market-leading approach in the use of technology and data to support our OEM
partners. We have developed a 'plug and play' model with DXP (Digital
Experience Platform) and DAP (Data Analytics Platform) which provide us with
insight and analytics that helps us to make smarter decisions and provide
end-customers with an enhanced experience.
In 2024, we rolled out latest versions of DXP and DAP into more markets with
more OEMs. In addition, we utilised new technologies to drive efficiencies
across our business, for example in the development of an AI-based forecasting
algorithm for parts which helps to ensure our OEMs' parts are competitively
priced across our distribution channels
Optimising to support resilient margins
Our Accelerate+ strategy is also focused on optimising key elements of our
business, to ensure Inchcape remains the most efficient and effective
Distribution partner for our OEMs.
Discipline around contract exits
As the Group scales and grows, we aim to ensure that we have an optimal
portfolio of brands which is best suited to our business and our markets. To
that end, we periodically conduct a limited level of portfolio
rationalisation, to help us optimise our market presence and leverage our
infrastructure in the most efficient way.
In FY 2024, we mutually agreed to end 4 immaterial and dilutive Distribution
contracts with certain OEM partners. We expect this dynamic to continue in
future years, as we further rationalise our contract portfolio, to ensure we
drive value for both Inchcape and our OEM partners.
Non-core asset disposals
We are optimising our business through the divestment of non-core assets,
particularly retail-only businesses. Since 2019, we have disposed of a number
of non-core retail assets, generating approximately £750m in net cash
proceeds, including, in FY 2024, our UK retail business and a retail
aftersales business in the Americas.
This track record of non-core asset disposal of retail-only assets has ensured
that Inchcape is now fully focused on Distribution, which is capital-light,
more cash generative, higher growth and higher margin than retail-only
businesses.
Value-Added Services
The Group will also optimise through Value-Added Services, which provide an
opportunity to grow in key areas, including:
• The distribution of relatively high margin, OEM-certified parts,
including through our Digital Parts Platform in APAC;
• Developing and delivering Finance & Insurance products, by
utilising our global scale and strategic partnership;
• Supporting the New Energy Vehicle transition with early-stage,
specialist capabilities;
• Continuing to develop our used car proposition, leveraging our
strong third party independent retail network.
Our Sustainability approach
Underpinning Accelerate+, the Group has enhanced its Sustainability Framework
to address an evolving environment, with an ambition to accelerate the global
mobility transition. Through virtual seminars, the Group built an
understanding across senior leaders and colleagues in relation to a refreshed
Sustainability narrative, which garnered over 7,000 views during FY 2024.
As evidence of Inchcape's ambition to accelerate the global mobility
transition, in FY 2024, over 1,000 technicians enrolled in our Battery Repair
Training Program. In addition, the Group initiated a partnership with the
Singapore Polytechnic Academy, launching EV training courses, which were
completed by around 260 employees, helping them to gain the essential skills
to excel in the fast-evolving EV landscape.
The Group made progress against each of its four Sustainability pillars -
Planet, People, Places and Practices, as highlighted by a number of key
initiatives in FY 2024. On Planet, the Group achieved a 37% reduction in Scope
1 and 2 emissions since the 2019 baseline. On People, Inchcape achieved a 83%
score in Inclusion & Diversity in our employee survey and rolled out an
Inclusive Hiring Training Program for over 90% of hiring managers. On Places,
we developed our Women Mechanics Training Programme in Uruguay, with planned
expansion across the Americas. On Practices, over 16,000 colleagues were
engaged through our annual Code of Conduct attestation.
New medium term targets, FY 2025 - FY 2030
Over the medium term, the Group will continue to deliver value for
shareholders, supported by its key value drivers, highly cash generative and
capital-light business model and a disciplined approach to capital allocation,
the policy for which has been updated today to focus on dividends at 40% of
adjusted basic EPS, a commitment to on-going share buybacks and
value-accretive acquisitions.
Across FY 2025 to FY 2030, the Group expects to generate £2.5 billion in free
cash flow. This will be achieved by the Group delivering against its key value
drivers, through-the-cycle:
• Organic volume CAGR of 3% to 5%, through market growth and market
outperformance;
• Resilient operating margins of c.6%, driven by scale and cost
discipline;
• FCF: PAT conversion of c.100%, highlighting the highly cash
generative nature of the Group;
The £2.5 billion in free cash flow will be deployed through disciplined
capital allocation to deliver shareholder value of >10% EPS CAGR,
underpinned by consistently high ROCE of 25% to 30%.
Inchcape's medium term growth prospects will be supported by our diversified
and scaled global market leadership position, with our long-standing and
valuable OEM relationships and our differentiated technology capabilities.
Expectation of continued growth in FY 2025, with new share buyback of £250m
In the context of the Group's new medium term targets, FY 2025 is expected to
be another year of growth for Inchcape, at prevailing foreign exchange rates,
with product cycles and the ramp-up of new contracts skewing growth towards
the second half of the year.
The Group expects to deliver higher EPS growth in FY 2025, driven by profit
growth and share buybacks.
In line with the Group's updated capital allocation policy, Inchcape is
initiating a new share buyback programme of £250m, which will commence on 4
March 2025 and is expected to conclude within the next 12 months. This follows
the completion of the Group's most recent share buyback of £150m in Q1 2025.
The Board is declaring a final dividend of 17.2p (2023: 24.3p) for FY 2024.
Operating and financial review
% change % change % change
organic(2)
reported constant FX
2024 2023
Revenue
APAC 2,995 2,827 6 % 9 % - %
Europe & Africa 3,003 2,809 7 % 11 % 11 %
Americas 3,265 3,746 (13) % (4) % (4) %
Total 9,263 9,382 (1) % 4 % 2 %
Adjusted operating profit(1)
APAC 235 229 3 % 6 %
Europe & Africa 142 135 5 % 15 %
Americas 207 256 (19) % (9) %
Total 584 620 (6) % 2 %
Adjusted operating margin(1)
APAC 7.8 % 8.1 % (30)bps (30)bps
Europe & Africa 4.7 % 4.8 % (10)bps 20bps
Americas 6.3 % 6.8 % (50)bps (30)bps
Total 6.3 % 6.6 % (30)bps (20)bps
Segments have been redefined following the UK Retail business being classified
as a discontinued operation. See Note 2 for segmental definitions.
APAC (32% of revenue and 40% of adjusted operating profit) - growth from
acquisitions, resilient margins
Revenue grew 9% in constant currency, including flat organic revenue growth,
supported by a contribution from the acquisitions made in FY 2023, the
integration of which are on track. Performance in the region was broadly in
line with the market, in the context of mixed market momentum. In the second
half, certain markets were weaker, with tough comparators. Adjusted operating
profit(1) was up 6%, with adjusted operating margins(1) , down (30)bps to
7.8% (excluding a £16m property disposal in FY 2023, operating margins were
up 30bps in FY 2024). For FY 2025, mixed market momentum is expected to
continue, with competitive dynamics in certain markets, against tough
comparators in H1 2025. Growth is expected to be H2-weighted in FY 2025,
driven by the timing of planned launches of key models and the ramp-up of new
contracts. Margins are expected to remain resilient, supported by continued
cost discipline.
Europe & Africa (33% of revenue and 24% of adjusted operating profit) -
strong growth and market outperformance
Revenue grew 11% in constant currency, driven by excellent operational
delivery across the region. Europe achieved a record year in market share,
with substantial progress made in diversifying the region's OEM partner
portfolio. Organic growth in Europe normalised in H2 2024, reflecting the
order bank unwind in the region. Performance in Africa remained resilient.
Adjusted operating profit(1) was up 15%, with continued elevated adjusted
operating margins(1) of 4.7%. In H2 2024, operating margins returned to
historic levels, driven by the effect of the order bank unwind, some dilution
from the acceleration of contract win momentum in Europe and the translational
currency impact relating to Ethiopia. For FY 2025, lower revenue levels are
expected, against tough comparators, with operating margins expected to
moderate towards historic levels.
Americas (35% of revenue and 36% of adjusted operating profit) - improved
performance in H2 2024
Revenue fell (4)% in constant currency, with a robust performance across the
region, including positive organic growth in H2 2024. The region delivered an
excellent year in Distribution contract wins, with 14 contract awards, driven
by the strength of Derco's relationships. Adjusted operating profit(1) was
down (9)%, with adjusted operating margins(1) down (50)bps from FY 2023 to
6.3%, with the deleveraging effect of reduced market volumes, particularly
in H1 2024, and an improved operating margin exit rate in H2 2024 of 6.6%.
This was driven by better operating efficiency across the region, supported by
Derco cost synergies. For FY 2025, we have prudent expectations for a strong
market recovery, with the Group expecting to continue delivering margin
resilience. In addition, the region's revenue will be impacted by the sale of
a dilutive, non-core retail aftersales business, and some owned-retail sites,
in FY 2024 (which generated annual revenue of c.£80m).
For financial performance, cash flow information and balance sheet information
on our UK Retail business, classified as a discontinued operation, see note 9
Acquisitions and Disposals, in this report.
1. Operating profit and operating margin stated before adjusting items
2. Organic growth is defined as revenue growth in operations that have
been open for at least a year at constant foreign exchange rates. Note 12 APMs
Gross profit split
We provide disclosure on the split of our gross profit, including:
• Gross profit attributable to Vehicles: New Vehicles, Used Vehicles
and the associated income from finance and insurance products; and
• Gross profit attributable to Aftersales: Service and Parts
2024 2023 % change % change
reported constant FX
£m £m
Gross Profit
Vehicles 1,120 1,191 (6) % - %
Aftersales 486 469 4 % 12 %
Total 1,606 1,660 (3) % 4 %
During the year, we generated 30% of gross profit through Aftersales (2023:
28%).
Other financial items
Adjusting items: During the year, pre-tax adjusting items amounted to an
expense of £30m (2023: £89m). This was primarily driven by one-off costs
related to acquisition and integration costs of £42m (2023: £50m), mainly in
relation to Derco, and non-cash, non-operational losses arising from
hyperinflation accounting relating to Ethiopia of £8m (2023: £29m). These
factors were partly offset by a gain on disposal of a non-core retail
aftersales business in the Americas of £6m (2023: nil), and non-cash, net
impairment reversals of distribution agreements of £14m (2023: nil). After
adjusting items, reported profit before tax was £414m (2023: £378m).
Net financing costs: Adjusted net finance costs reduced to £142m (2023:
£154m), driven by the positive impact of a reduction in average net debt on
net interest costs. This was partly offset by an increase in inventory
financing costs associated with a more stable working capital profile, which
resulted in an expense of £56m (2023: £38m). Reported net finance costs were
£150m (2023: £193m). This includes £8m (2023: £29m) of adjusting items
relating to non cash, non-operational losses arising from hyperinflationary
accounting in Ethiopia.
Tax: On a continuing basis, the effective tax rate on adjusted profit before
tax is 31.3% (2023: 30.0%), and on statutory profit before tax is 31.2% (2023:
34.4%). The increase in the effective tax rate on adjusted profit includes the
impact of Pillar Two regulations which are relevant from 2024.
Non-controlling interests: Profits attributable to our non-controlling
interests increased to £14m (2023: £13m). The Group's non-controlling
interests comprise a 40% interest in the Group's distribution operations in
the Philippines and a 30% holding in the Mercedes-Benz distribution business
in Indonesia. Other significant non-controlling interests include a 30% share
in NBT Brunei and a 10% share of Subaru Australia.
Dividend: The Board has proposed a final ordinary dividend of 17.2p, which is
subject to the approval of shareholders at the 2025 Annual general meeting,
and if approved will be paid on 16(th) June 2025. This follows an interim
dividend of 11.3p, and takes the total dividend in respect of FY 2024 to
28.5p. The Dividend Reinvestment Plan is available to ordinary shareholders
and the final date for receipt of elections to participate is 23(rd) May 2025.
Capital expenditure: During 2024, the Group incurred net capital expenditure
of £70m (2023: £62m), consisting of £79m gross capital expenditure (2023:
£93m) and £9m of proceeds from the sale of property (2023: £31m). In 2025,
we continue to expect net capital expenditure of less than 1% of Group
revenue.
Financing: As at 31 December 2024, the funding structure of the Group is
comprised of a committed syndicated revolving credit facility of £900m (2023:
£900m), sterling Private Placement Loan Notes totalling £140m (2023:
£210m), and a 5 year bond of £350m, at a fixed coupon of 6.5%. During the
year, the term facility of £250m was repaid, following the disposal of the UK
Retail business, together with the debt acquired from acqusitions in 2022 and
2023. As at 31 December 2024 the syndicated revolving credit facility was
drawn £55m (2023: £150m). Excluding our Revolving Credit Facility, 100% of
the Group's corporate debt is at fixed rates and is not due to be repaid for
at least 2 years. The Group remains well within its debt covenants.
Pensions: As at 31 December 2024, the IAS 19 net post-retirement surplus was
£23m (2023: £67m), with the decrease driven largely by lower than expected
returns on scheme assets partially offset by movements in corporate bond
yields affecting the discount rate assumption used to determine the value of
scheme liabilities. In line with the funding programme agreed with the
Trustees, the Group made an additional cash contributions to the UK pension
schemes of £1m, (FY 2023: £2m). In November 2024, the Trustee of Inchcape
Motor Pension Schemes completed a buy-in transaction whereby the assets of the
scheme were used to acquire a bulk purchase annuity policy under which the
benefits payable to the members of the scheme are now fully insured. The
insurance policy was purchased using the existing assets of the scheme with no
additional funding required from the Group.
Foreign currency translation: The impact of foreign currency translation on
profit before tax was (10)%, driven by the strengthening of the GBP and the
devaluation of the Ethiopian Birr during the year. The impact of foreign
currency translation on the assets and liabilities of the Group's foreign
operations resulted in a loss of £245m (2023: £133m) which has been reported
within other comprehensive income.
Key translational foreign exchange pairings and underlying adjusted profit
before tax sensitivity:
The Group operates in around 40 markets globally and therefore has a broad
range of translational currency exposures against GBP, its reporting
currency. The Group's major currency pairs are the Euro, the Australian
Dollar, the US Dollar and the Chilean Peso. At prevailing rates, for FY 2025,
a 1% movement in any of these currencies would have an impact on the Group's
annual underlying adjusted profit before tax of approximately £1m. Other key
currency pairs are the Hong Kong Dollar, the Singaporean Dollar, the Colombian
Peso and the Peruvian Sol. At prevailing rates, for FY 2025, a 1% movement in
any of these currencies would have an impact on the Group's annual underlying
adjusted profit before tax of less than £0.5m. Adjusted profit before tax
from all of these currencies contribute around 80% of the Group's adjusted
profit before tax.
RISKS
PRINCIPAL BUSINESS RISKS
The Board has reassessed the principal business risks which could impact the
performance of the Group. These include:
Tier 1:
• Strategy delivery and transformation;
• EV transition;
• Margin pressure;
• Cybersecurity incident;
• Macro-economic conditions;
• HSE: Health, safety or environmental incident; and
• Political risk;
Tier 2:
• Acquisition execution;
• Business interruption (pandemic, natural hazards);
• Financial reporting, fraud;
• Foreign exchange volatility;
• Legal/regulatory compliance;
• Loss of material Distribution contract;
• Loss of technology systems (non-cyber);
• People engagement and retention;
• People future skills;
• Inventory optimisation
The materialisation of these risks could have an adverse effect on the Group's
results or financial condition. If more than one of these risks occur, the
combined overall effect of such events may be compounded. The Group faces many
other risks which, although important and subject to regular review, have been
assessed as less significant and are not listed here. These include, for
example, supply chain risks and certain financial risks.
The Group has defined and implemented systems of risk management and internal
control designed to address these risks. These systems can offer reasonable,
but not absolute assurance, regarding the management of these risks to an
acceptable level. In particular, the effectiveness of these systems may change
over time, for example with acquisitions or disposals or as the business
implements major change programmes. The effectiveness of these systems are
reviewed annually by the Audit Committee and improvements are made as
required.
In 2024, 'New market entrants: business models or technology' and 'Derco
integration' were removed from our Tier 2 risks, however, 'business as
usual' aspects of these risks continue to be monitored through our list of
principal risks such as, Strategy Delivery and Transformation, Acquisition
Execution and Margin Pressure. We have also introduced a new principal risk of
'Inventory Optimisation' which replaces 'Supply Chain Disruption', and
although still monitored through our list of emerging risks, the Group's focus
going forward will be on potential risks around over-supply and over-capacity,
particularly in relation to vehicles.
Also arising in the period are potential tariff tensions following the US
administration imposing incremental tariffs on Canada, Mexico and China.
Although early days, the interconnectivity of the global automotive supply
chain could be impacted in the future, resulting in rising costs for our OEMs
which in turn could impact on our margins and customer base. We will monitor
the evolution of this geopolitical risk across the group, whilst also
continuing to ensure risks to our product portfolio mix are managed including
effective and nimble sales and operational planning.
APPENDIX - REGIONAL BUSINESS MODELS
Americas
Country Brands
Argentina Subaru, Suzuki
Barbados¹ Changan, Chrysler, Daimler Trucks, Dodge, Freightliner, FUSO, Isuzu, JCB,
Jeep, John Deere, Mercedes-Benz, Mitsubishi, Peugeot, Subaru, Suzuki, Western
Star
Bolivia Avatr, Changan, Deepal, JAC Motors, Joylong, Komatsu, Mazda, Renault, Subaru,
Suzuki
Chile Avatr, BMW, BMW Motorrad, Deepal, DFSK, Changan, Great Wall, Hangcha,
Harley-Davidson, Haval, Hino, Jaguar, JCB, Komatsu, Land Rover, Landini,
Massey Ferguson, Mazda, MINI, Porsche, Renault, Rolls-Royce, Still, Subaru,
Suzuki, Volvo
Colombia Citroen, Develon, DFSK, Dieci, Doosan, DS Automobiles, Great Wall, Hangcha,
Hino, JAC Trucks, Jaguar, Komatsu, Land Rover, Liebher, Linde, Mack,
Mercedes-Benz, Still, Subaru, Suzuki, XCMG
Costa Rica Avatr, Changan, Deepal, JAC, Suzuki
Ecuador Freightliner, Forland, Geely, Mercedes-Benz, Subaru, Western Star
El Salvador Freightliner, Geely, Mercedes-Benz, Western Star
Guatemala Freightliner, Geely, Mercedes-Benz, Western Star
Honduras Freightliner, Geely, Mercedes-Benz, Western Star
Panama Suzuki
Peru Avatr, BMW, BMW Motorrad, Changan, Deepal, DFSK, Great Wall, Haval, Hino, JAC
Motors, Komatsu, Mazda, MINI, Renault, Still, Subaru, Suzuki, XCMG
Uruguay Freightliner, Fuso, Mercedes-Benz
1.Distribution agreements for these brands across a range of Caribbean
islands, centred in Barbados
APAC
Country Brands
Brunei Lexus, Toyota
Guam² BMW, Chevrolet, Lexus, Toyota, Morrico heavy equipment³
Hong Kong Daihatsu, Hino, Jaguar, Land Rover, Lexus, Maxus, ORA, Toyota
Indonesia Great Wall, Harley-Davidson, Jaguar, Land Rover, Mercedes-Benz
Macau Daihatsu, Hino, Jaguar, Land Rover, Lexus, ORA, Toyota
Saipan Toyota, Lexus
Singapore BYD Commercial Vehicles, Hino, Lexus, Suzuki, Toyota
Philippines Changan, Harley Davidson, Jaguar, Land Rover, Mazda, Mercedes-Benz, Ram
Thailand Jaguar, Land Rover, Tata Motors
Australia Distribution: Deepal, Citroen, Foton, Peugeot, Subaru
Retail only: Isuzu Ute, Jeep, Kia, Mitsubishi, Volkswagen
New Zealand Maxus, Subaru
2. Distribution agreements for these brands across a range of Pacific islands,
centred in Guam
3. Morrico heavy equipment - Bomag, CNHI International SA, Cummins, Daimler,
Detroit Diesel International Direct, Dieci, DTNA , EL Industries, Fuso,
Haulotte, Hyundai, Kohler, Load King, New Holland, Rosenbauer, Schwarze,
Sullivan Palatek, Vac Con, WanCo
Europe & Africa
Country Brands
Belgium BYD, Lexus, Toyota
Bulgaria(4) Lexus, Toyota
Estonia BMW, BMW Motorrad, BYD, Ford, Jaguar, Land Rover, Mazda, MINI
Finland GAC, Jaguar, Land Rover, Mazda, XPeng
Greece Lexus, Toyota
Latvia BMW, BMW Motorrad, Ford, Jaguar, Land Rover, Mazda, MINI
Lithuania BMW, BMW Motorrad, Ford, Jaguar, Land Rover, Mazda, MINI
Luxembourg BYD, Lexus, Toyota
North Macedonia Lexus, Toyota
Poland Distribution: Jaguar, Land Rover, XPeng
Retail only: BMW, BMW Motorrad, MINI
Romania Lexus, Toyota
Djibouti Changan, Komatsu, Toyota
Ethiopia BYD, Hino, Komatsu, New Holland, Suzuki, Toyota
Kenya(5) BMW, BMW Motorrad, Changan, Jaguar, Land Rover
4. Distribution agreement for Toyota & Lexus also distributed to Albania,
centred in Bulgaria. 5. Distribution agreement for Changan also distributed to
Tanzania, centred in Kenya, distribution agreement for BMW also distributed to
Djibouti, centred in Kenya and distribution agreement for Jaguar, Land Rover
also distributed to Uganda, centred in Kenya
Continuing operations 2024 2023
Notes £m £m
Revenue 2 9,263 9,382
Cost of sales (7,657) (7,722)
Gross profit 1,606 1,660
Net operating expenses (1,044) (1,090)
Operating profit 2 562 570
Share of profit after tax of joint ventures and associates 2 1
Profit before finance and tax 564 571
Finance income 4 71 51
Finance costs 4 (221) (244)
Profit before tax from continuing operations 414 378
Tax 5 (129) (130)
Profit for the year from continuing operations 285 248
Profit from discontinued operations 150 35
Total profit for the year 435 283
Profit attributable to:
- Owners of the parent 421 270
- Non-controlling interests 14 13
435 283
Earnings per share from continuing operations attributable to the owners of
the parent
Basic earnings per share (pence) 6 66.4p 57.1p
Diluted earnings per share (pence) 6 65.6p 56.4p
Earnings per share attributable to the owners of the parent
Basic earnings per share (pence) 6 103.1p 65.6p
Diluted earnings per share (pence) 6 101.9p 64.8p
Alternative performance measures
Operating profit from continuing operations 562 570
Adjusting items within net operating expenses: 3 22 50
Acquisition and integration costs 42 50
Disposal of businesses (6) -
Derecognition of intangibles 5 -
Impairment reversals (19) -
Adjusted operating profit from continuing operations 584 620
Share of profit after tax of joint ventures and associates 2 1
Adjusted profit before finance and tax from continuing operations 586 621
Net finance costs (150) (193)
Adjusting items within net finance costs: 3 8 39
Net monetary loss on hyperinflation 8 29
Interest on deferred dividend payment - 10
Adjusted profit before tax from continuing operations 444 467
Tax on adjusted profit (139) (140)
Adjusted profit after tax from continuing operations 305 327
Adjusted earnings per share from continuing operations
Basic adjusted earnings per share 6 71.3p 76.3p
Diluted adjusted earnings per share 6 70.4p 75.3p
See note 12 on page 31 for further details of alternative performance
measures.
The notes on pages 16 to 34 are an integral part of these condensed
consolidated financial statements.
2024 2023
£m £m
Profit for the year 435 283
Other comprehensive income/(expense):
Items that will not be reclassified to the consolidated income statement
Retirement benefit schemes
- net actuarial losses (46) (20)
- deferred tax on actuarial losses (1) (1)
(47) (21)
Items that may be or have been reclassified subsequently to the consolidated
income statement
Cash flow hedges
- net fair value gains/(losses) 22 (48)
- tax on cash flow hedges(1) (14) 17
Investments held at fair value
- net fair value gains/(losses) 3 (3)
Deferred tax on taxation losses - -
Foreign currency translation
Exchange differences on translation of foreign operations (245) (133)
Recycling of foreign currency reserve (4) (1)
Adjustments for hyperinflation (including tax) (4) 36
(242) (132)
Other comprehensive expense for the year (289) (153)
Total comprehensive income for the year 146 130
Total comprehensive income for the year attributable to:
- Owners of the parent 133 120
- Non-controlling interests 13 10
146 130
Total comprehensive income attributable to owners of Inchcape plc arising
from:
- Continuing operations (17) 85
- Discontinued operations 150 35
1. Taxation in other comprehensive income in respect of cash flow hedges
is comprised of a deferred tax charge of £13m (2023: credit of £18m) and a
current tax charge of £1m (2023: charge of £1m).
The notes on pages 16 to 34 are an integral part of these condensed
consolidated financial statements.
2024 2023
Notes £m £m
Non-current assets
Intangible assets 1,156 1,271
Property, plant and equipment 589 893
Right-of-use assets 271 364
Investments in joint ventures and associates 21 21
Financial assets at fair value through other comprehensive income 4 1
Derivative financial instruments - 1
Trade and other receivables 34 49
Deferred tax assets 91 105
Retirement benefit asset 36 84
2,202 2,789
Current assets
Inventories 1,935 2,718
Trade and other receivables 829 835
Derivative financial instruments 48 38
Current tax assets 55 56
Cash at bank and short term deposits 8b 549 689
Assets held for sale 20 14
3,436 4,350
Total assets 5,638 7,139
Current liabilities
Trade and other payables (2,565) (3,150)
Derivative financial instruments (47) (88)
Current tax liabilities (70) (81)
Provisions (50) (69)
Lease liabilities 8b (66) (81)
Borrowings 8b (195) (652)
(2,993) (4,121)
Non-current liabilities
Trade and other payables (106) (69)
Provisions (26) (39)
Derivative financial instruments - (9)
Deferred tax liabilities (246) (267)
Lease liabilities 8b (236) (359)
Borrowings 8b (544) (638)
Retirement benefit liability (13) (17)
(1,171) (1,398)
Total liabilities (4,164) (5,519)
Net assets 1,474 1,620
Equity
Share capital 40 42
Share premium 147 147
Capital redemption reserve 145 143
Merger reserve 312 312
Other reserves (285) (63)
Retained earnings 1,020 940
Equity attributable to owners of the parent 1,379 1,521
Non-controlling interests 95 99
Total equity 1,474 1,620
The notes on pages 16 to 34 are an integral part of these condensed
consolidated financial statements.
Notes Share Share Capital redemption reserve Merger Other reserves Retained earnings Total equity attributable to owners of the parent £m Non-controlling interests Total shareholders' equity
£m
£m
£m
capital Premium reserve £m £m
£m
£m £m
At 1 January 2023 38 147 143 316 69 820 1,533 34 1,567
Profit for the year - - - - - 270 270 13 283
Other comprehensive income/(expense) for - - - - (130) (20) (150) (3) (153)
the year
Total comprehensive income for the year - - - - (130) 250 120 10 130
Hedging gains and (losses) transferred to inventory - - - - (2) - (2) - (2)
Written put option - - - - - (1) (1) - (1)
Shares issued 4 - - (4) - - - - -
Acquisition of non-controlling interests - - - - - 3 3 (3) -
Non-controlling interests on acquisition of subsidiaries - - - - - - - 64 64
Share-based payments, net of tax - - - - - 15 15 - 15
Purchase of own shares by the Inchcape Employee Trust - - - - - (19) (19) - (19)
Dividends:
- Owners of the parent - - - - - (128) (128) - (128)
- Non-controlling interests - - - - - - - (6) (6)
At 1 January 2024 42 147 143 312 (63) 940 1,521 99 1,620
Profit for the year - - - - - 421 421 14 435
Other comprehensive expense for the year - - - - (241) (47) (288) (1) (289)
Total comprehensive income/(expense) for the year - - - - (241) 374 133 13 146
Hedging gains and (losses) transferred to inventory - - - - 19 - 19 - 19
Share buyback programme (2) - 2 - - (151) (151) - (151)
Share-based payments, - - - - - 18 18 - 18
net of tax
Purchase of own shares by the Inchcape Employee Trust - - - - - (14) (14) - (14)
Dividends:
- Owners of the parent - - - - - (147) (147) - (147)
- Non-controlling interests - - - - - - - (17) (17)
At 31 December 2024 40 147 145 312 (285) 1,020 1,379 95 1,474
The notes on pages 16 to 34 are an integral part of these condensed
consolidated financial statements.
2024 2023
Notes £m £m
Cash generated from operating activities
Cash generated from operations 8a 873 900
Tax paid (134) (156)
Interest received 62 46
Interest paid (215) (197)
Net cash generated from operating activities 586 593
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 9a 5 (137)
Net cash inflow from sale of businesses 9b 391 1
Proceeds from disposal of investments in joint ventures and associates - 2
Purchase of investments in joint ventures and associates - (3)
Purchase of property, plant and equipment (76) (88)
Purchase of intangible assets (3) (5)
Proceeds from disposal of property, plant and equipment 9 31
Dividends received from joint ventures and associates 1 1
Receipt from finance sub-lease receivables 2 3
Lease payments prior to commencement date (1) -
Net cash generated from/(used in) investing activities 328 (195)
Cash flows from financing activities
Share buyback programme (147) -
Purchase of own shares by the Inchcape Employee Trust (14) (19)
Repayment of acquisition financing term loan and bridge facilities 8b (250) (350)
Repayment of Private Placement loan notes 8b (70) -
Cash (outflow)/inflow from revolving credit facility 8b (95) 150
Cash inflow from bond issuance 8b - 348
Net cash outflow from other borrowings 8b (69) (560)
Payments to former shareholders of Derco group - (267)
Payment of capital element of lease liabilities 8b (81) (87)
Equity dividends paid 7 (147) (128)
Acquisition of non-controlling interests - (15)
Dividends paid to non-controlling interests (17) (6)
Net cash used in financing activities (890) (934)
Net increase/(decrease) in cash and cash equivalents 8b 24 (536)
Cash and cash equivalents at beginning of the period 440 1,050
Effect of foreign exchange rate changes (98) (74)
Cash and cash equivalents at end of the period 366 440
Cash and cash equivalents consist of:
Cash at bank 458 610
Short-term deposits 91 79
Bank overdrafts (183) (249)
366 440
The notes on pages 16 to 34 are an integral part of these condensed
consolidated financial statements.
Basis of preparation
The Group consolidated financial statements have been prepared in accordance
with UK-adopted International Financial Reporting Standards (IFRS) and the
Companies Act 2006 applicable to companies reporting under IFRS.
The condensed set of financial information presented for the years ended 31
December 2024 and 2023 do not constitute statutory accounts within the meaning
of Section 434 of the Companies Act 2006. The financial information for the
year ended 31 December 2023 is derived from the statutory accounts for that
year which have been delivered to the Registrar of Companies. The report of
the auditors on those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under s498(2) or
(3) of the Companies Act 2006. The financial information for the year ended 31
December 2024 and the comparative information have been extracted from the
audited consolidated financial statements for the year ended 31 December 2024
prepared under IFRS, which have not yet been approved by the shareholders and
have not yet been delivered to the Registrar. The report of the auditors on
the consolidated financial statements for 2024 was unqualified and did not
contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Going concern
Based on the Group's cash flow forecasts and projections, the Board is
satisfied that the Group will operate within the level of its committed
facilities for the foreseeable future. For this reason, the Board continues to
adopt the going concern basis in preparing its financial statements. In making
this assessment, the Group has considered available liquidity in relation to
net debt and committed facilities, the Group's latest forecasts for 2025 and
2026 cash flows, together with adjusted scenarios.
Committed bank facilities and Private Placement borrowings amount to £1,040m,
of which £195m was drawn at 31 December 2024. In June 2023, the Group issued
a £350m bond offering with a coupon of 6.5%, due to mature in June 2028.
The Private Placement loan notes are subject to an interest cover covenant
based on an adjusted EBITA measure to interest on consolidated borrowings
measured on a trailing 12-month basis at June and December.
The latest Group forecasts for 2025 and 2026 indicate that the Group is
expected to be compliant with this covenant throughout the forecast period and
have sufficient liquidity to continue operating throughout that period.
A range of sensitivities has been applied to the forecasts to assess the
Group's compliance with its covenant requirements over the forecast period.
These sensitivities included:
• a 12-month reduction in New and Used revenue from July 2025,
resulting from decreasing consumer demand in response to fiscal tightening and
resulting economic downturns;
• a reduction in reported GBP earnings from July to December 2025
resulting from the strengthening of the sterling relative to other currencies;
• a general liquidity reduction impacting working capital from January
2026;
• with no mitigating actions applied in relation to the sensitivities
described above.
In a scenario where all of the above sensitivities occur at the same time, the
Group has modelled the possibility of the interest cover covenant being
breached in 2025 and 2026. With the interest cover covenant measured on a
trailing 12-month basis, the sensitised forecasts indicate that the Group is
not expected to breach any covenants and would be compliant with the interest
cover requirements throughout the forecast period. Additionally, under these
circumstances, the Group expects to have sufficient funds to meet cash flow
requirements.
A reverse stress test scenario analysis, concluded that a set of circumstances
in which the Group would breach its covenant or have insufficient funds to
meet cash flow requirements are considered to be remote, relative to the
sensitivities referred to above.
Therefore, the board concluded that the Group will be able to operate within
the level of its committed facilities for the foreseeable future. The
directors consider it appropriate to adopt the going concern basis of
accounting in preparing the financial statements for the year ending 31
December 2024.
Accounting policies
The condensed set of consolidated financial information has been prepared
using accounting policies consistent with those in the Group's Annual Report
and Accounts 2023 with the exception of the following standards, amendments
and interpretations which have been newly adopted from 1 January 2024:
Newly adopted accounting standards
From 1 January 2024, the following standards become effective in the Group's
consolidated financial statements:
• Amendments to IAS 1 - Non-current liabilities with covenants
• Amendments to IAS 1 - Classification of liabilities as current or
non-current
• Amendments to IFRS 16 - Leases on sale and leaseback
• Amendments to IAS 7 and IFRS 7 - Supplier finance
• Amendments due to Finance (No. 2) Act 2023 for Pillar Two income
inclusion (IIR)
The adoption of the standards and interpretations listed above has not led to
any material impact on the financial position or performance of the Group.
The Group has applied the amendments to IAS7 and IFRS 7 for the first time in
the current year. The amendments add a disclosure objective to IAS 7 stating
that an entity is required to disclose information about its supplier finance
arrangements that enables users of financial statements to assess the effects
of those arrangements on the entity's liabilities and cash flows. In addition,
IFRS 7 is amended to add supplier finance arrangements as an example within
the requirements to disclose information about an entity's exposure to
concentration of liquidity risk. The Group has entered into vehicle funding
arrangements to fund the purchase of vehicles.
The Group has not early adopted other standards, amendments to standards or
interpretations that have been issued but are not yet effective.
Designation of Ethiopia as a hyperinflationary economy
The Group financial statements include adjustments for hyperinflation,
following the application of IAS 29 Financial Reporting in Hyperinflationary
Economies in relation to the Group's operations with a functional currency of
Ethiopian Birr.
The Group's consolidated financial statements include the results and
financial position of its Ethiopian operations restated to the purchasing
power or inflationary measuring unit current at the end of the year, leading
to a hyperinflationary loss in respect of monetary items being reported in
finance costs, and treated as an adjusting item. The results of the Group's
Ethiopian operations have been translated at the closing exchange rate, as
required by IAS 21 The Effects of Changes in Foreign Exchange Rates for
hyperinflationary foreign operations.
Whilst IAS 29 Financial Reporting in Hyperinflationary Economies is applied in
individual financial statements as though the relevant economy was always
hyperinflationary, comparative amounts are not restated in consolidated
amounts already presented in a stable currency. The resulting difference in
the opening Ethiopian net assets has been presented as a translation
adjustment in other comprehensive income.
The inflationary factors used by the Group are the official price indices
published by the Central Statistical Agency of Ethiopia. Hyperinflationary
adjustments have been calculated using the price index prevailing at 31
December 2024, which was a CPI index of 495.4 (31 December 2023: CPI index
425.1). The adjusted results and financial position of Ethiopia were
translated at the year-end closing rate before being included in the Group's
consolidated financial statements.
Presentation of comparative amounts
Comparative amounts presented in the consolidated income statement, the
consolidated statement of comprehensive income and relevant notes reflect the
classification of the UK Retail business as a discontinued operation in 2023.
The Group has three reportable segments which have been identified based on
the operating segments of the Group that are regularly reviewed by the chief
operating decision-maker, which has been determined to be the Group Executive
Team, in order to assess performance and allocate resources. Operating
segments are then aggregated into reporting segments to combine those with
similar economic characteristics. Following the classification in the current
period of the Group's retail operations in the UK as a discontinued operation,
the Group's internal reporting has been updated to no longer distinguish
between 'Distribution' and 'Retail'. As a result the Group's remaining retail
operation in Europe has been combined with the Europe & Africa
distribution business to form a single reportable segment.
The Group reports the performance of its reporting segments after the
allocation of central costs. These represent costs of Group functions.
Reporting segment performance for 2023 has been restated for the re-allocation
of central costs following the classification of the UK retail operations as a
discontinued operation.
The following summary describes the operations of each of the Group's
reportable segments:
APAC Exclusive distribution, sales and marketing activities of New Vehicles and
Parts.
Europe & Africa
Americas
Sale of New and Used Vehicles together with logistics services where the Group
may also be the exclusive distributor, alongside associated Aftersales
activities of service, body shop repairs and parts sales.
APAC Europe & Africa Americas Total
2024 £m £m £m £m
Revenue
Total revenue 2,995 3,003 3,265 9,263
Adjusted operating profit from continuing operations 235 142 207 584
Operating adjusting items (22)
Operating profit from continuing operations 562
Share of profits after tax of joint ventures and associates 2
Profit before finance and tax 564
Finance income 71
Finance costs (221)
Profit before tax from continuing operations 414
Tax (129)
Profit for the year from continuing operations 285
The Group's reported segments are based on the location of the Group's assets.
Revenue earned from sales is disclosed by origin and is not materially
different from revenue by destination. Chile and Australia are presented
separately as these comprise more than 10% of the Group's revenue. Revenue is
further analysed as follows:
2024 £m
Chile 1,532
Australia 1,142
Rest of the world 6,589
Group 9,263
The Group's non-current assets by location comprise intangible assets,
property, plant and equipment, right-of-use assets, investments in joint
ventures and associates, and are analysed below. Chile is presented separately
as it comprises more than 10% of the Group's non-current assets.
2024 £m
Non-current assets
Chile 590
Rest of the world 1,447
Group 2,037
APAC Europe & Africa Americas Total
2024 £m £m £m £m
Segment assets and liabilities
Segment assets 833 742 1,206 2,781
Segment liabilities (1,014) (761) (855) (2,630)
Other assets 2,856
Other liabilities (1,533)
Total net assets 1,474
Segment assets and liabilities represent the Group's assets and liabilities
that are regularly reviewed by the chief operating decision maker. They
comprise of inventory, receivables, payables and derivative assets and
liabilities that hedge trade payables.
APAC Europe & Africa Americas Total
2024 from continuing operations £m £m £m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 28 11 21 60
- Leased vehicles, rental machinery and equipment 23 3 12 38
- Right-of-use assets 17 12 10 39
- Intangible assets 1 1 1 3
Depreciation and impairment
- Property, plant and equipment 16 8 18 42
- Leased vehicles, rental machinery and equipment 6 - 12 18
- Right-of-use assets 33 10 31 74
Amortisation of intangible assets 2 1 6 9
Derecognition of distribution agreements - - 5 5
Impairment reversal of distribution agreements - - (19) (19)
Impairment of right of use assets 1 - - 1
Net provisions charged/(credited) to the consolidated income statement 23 (6) (4) 13
Net provisions include inventory, trade receivables impairment and other
liability provisions.
APAC Europe & Africa Americas Total
2023 £m £m £m £m
Revenue
Total revenue 2,827 2,809 3,746 9,382
Adjusted operating profit from continuing operations 229 135 256 620
Operating adjusting items (50)
Operating profit from continuing operations 570
Share of losses after tax of joint ventures and associates 1
Profit before finance and tax 571
Finance income 51
Finance costs (244)
Profit before tax from continuing operations 378
Tax (130)
Profit for the year from continuing operations 248
The Group's reported segments are based on the location of the Group's assets.
Revenue earned from sales is disclosed by origin and is not materially
different from revenue by destination. Chile and Australia are presented
separately as these comprise more than 10% of the Group's revenue. Revenue is
further analysed as follows:
2023 £m
Chile 1,773
Australia 1,310
Rest of the world 6,299
Group 9,382
The Group's non-current assets by location comprise intangible assets,
property, plant and equipment, right-of-use assets, joint ventures and
associates, and are analysed as shown in the table below.
2023 £m
Non-current assets
UK 297
Rest of the world 2,252
Group 2,549
APAC Europe & Africa Americas Total
2023 £m £m £m £m
Segment assets and liabilities
Segment assets 914 854 1,409 3,177
Segment liabilities (1,171) (805) (766) (2,742)
Other assets 3,210
Other liabilities (2,249)
Net assets from continuing operations 1,396
Net assets from discontinued operations 224
Total net assets 1,620
Segment assets and liabilities represent the Group's assets and liabilities
that are regularly reviewed by the chief operating decision maker. They
comprise of inventory, receivables, payables and derivative assets and
liabilities that hedge trade payables.
APAC Europe & Africa Americas Total
2023 from continuing operations £m £m £m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 27 13 27 67
- Leased vehicles, rental machinery and equipment 20 26 15 61
- Right-of-use assets 12 8 14 34
- Intangible assets 1 1 2 4
Depreciation and impairment
- Property, plant and equipment 11 7 20 38
- Leased vehicles, rental machinery and equipment 6 1 13 20
- Right-of-use assets 30 10 35 75
Amortisation of intangible assets 2 1 7 10
Net provisions charged to the consolidated income statement 8 8 31 47
Net provisions include inventory, trade receivables, impairment and other
liability provisions.
2024 2023
From continuing operations £m £m
Acquisition and integration costs (42) (50)
Gain on disposal of business (see note 9b) 6 -
Impairment reversal of distribution agreements 19 -
Derecognition of distribution agreements (5) -
Gain on pension indexation - -
Total adjusting items in operating profit (22) (50)
Adjusting items in finance costs:
Net monetary loss on hyperinflation (8) (29)
Interest on dividend payments to former shareholders of Derco - (10)
Total adjusting items before tax (30) (89)
Tax on adjusting items (see note 5) 10 10
Total adjusting items (20) (79)
During the year, operating costs of £42m (2023: £50m) were incurred in
connection with the acquisition and integration of businesses. These costs
have been reported as adjusting items to better reflect the underlying
performance of the business. These primarily relate to the acquisition and
integration of the Derco group and the businesses acquired in Indonesia, the
Philippines and New Zealand. The integration of the Derco group is a
multi-year programme that is expected to complete in 2025.
Impairment reversal during the year of £19m (2023: £nil) relates to the
Central America - Suzuki CGU and derecognition of intangibles of £5m (2023:
£nil) relates to a distribution agreement in Bolivia.
In December 2024, the Group sold its share in its non-genuine spare parts
business in Chile. The reported gain of £6m (2023: £nil) includes disposal
costs and a gain relating to the recycling of cumulative exchange differences
previously recognised in other comprehensive income.
The Group financial statements include adjustments for hyperinflation,
following the application of IAS 29 Financial Reporting in Hyperinflationary
Economies in relation to the Group's operations with a functional currency of
Ethiopian Birr. The results and financial position of Ethiopia for the year
ended 31 December 2024 have been restated to include the effect of indexation
and the resulting £8m net monetary loss on hyperinflation (2023: net monetary
loss of £29m) has been recognised within net finance costs and reported as an
adjusting item.
At 31 December 2022, a liability was acquired, as part of the Derco
acquisition, for the payment of a pre-completion dividend to former
shareholders. The payment of this dividend was agreed to be made in four
tranches, throughout 2023,with interest accruing on the outstanding amounts.
At 30 June 2023, three of the tranches had been paid and interest of £10m had
been recognised. This interest expense was recognised within finance costs and
reported as an adjusting item.
2024 2023
From continuing operations £m £m
Interest expense on bank and other borrowings 122 124
Finance costs on lease liabilities 19 19
Interest on inventory financing 56 38
Net monetary loss on hyperinflation (note 3) 8 29
Interest on deferred dividend payment - 10
Other finance costs 16 24
Finance costs 221 244
Bank and other interest receivable (64) (46)
Net interest income on post-retirement plan assets and liabilities (3) (4)
Other finance income (4) (1)
Finance income (71) (51)
Net finance costs 150 193
Analysed as:
Net finance costs excluding adjusting finance costs 142 154
Finance costs reported as adjusting items 8 39
Net finance costs 150 193
Other finance costs include fees, commissions and foreign exchange gains and
losses.
Since 2022, in accordance with IAS 29 Financial Reporting in Hyperinflationary
Economies, the results and financial position of the Group's operations in
Ethiopia have been restated to the purchasing power or inflationary measuring
unit current at the end of the reporting period. Therefore, finance costs
include the loss on hyperinflation in respect of monetary items, which is also
treated as an adjusting item.
This note only provides information about corporate income taxes under IFRS .
The Group has subsidiaries in over 40 territories across the world. The Group
pays and collects many different taxes in addition to corporate income taxes
including: payroll taxes, value added and sales taxes, property taxes,
product-specific taxes and environmental taxes. Such taxes borne by the Group
are included in profit before tax.
2024 2023
From continuing operations £m £m
Current tax - United Kingdom tax - -
- Overseas tax 131 146
- Pillar 2 income taxes 2 -
Adjustments to prior year liabilities - United Kingdom tax (3) -
- Overseas tax (3) (6)
Current tax 127 140
Deferred tax 2 (10)
Total tax charge 129 130
- Tax charge on profit before adjusting items 139 140
- Tax credit on adjusting items (10) (10)
Total tax charge 129 130
Details of the adjusting items for the year can be found in note 3. Not all of
the adjusting items will be taxable or deductible for tax purposes. Therefore,
the tax credit on adjusting items represents the total of the current and
deferred tax on only those elements that are assessed as taxable or
deductible. In the current year, the tax credit on adjusting items includes
the local tax effect of the disposal of the non-genuine spare parts business
in Chile (see note 9a).
a) Factors affecting the tax expense for the year
The effective tax rate for the year is 31.2% (2023: 34.4%). The effective tax
rate on adjusted profit before tax is 31.3% (2023: 30.0%). The weighted
average tax rate is 23.0% (2023: 22.4%). The weighted average tax rate
comprises the average statutory rates across the Group, weighted in proportion
to accounting profits and losses before tax.
The Group is within the scope of Pillar Two with effect from 1 January 2024
under UK legislation. Pillar Two legislation has also been enacted in other
jurisdictions where Inchcape operate and may affect computation of top-up
taxes for those markets. Under the legislation, the Group is liable to pay a
top-up tax for the difference between its Pillar Two effective tax rate per
jurisdiction and the 15% minimum rate. Included within the current tax charge
for the year is a Pillar Two income tax charge of £2m, payable by June 2026.
The main jurisdictions in which exposure to this tax exists include Bulgaria
and Macao.
The Group applies the exception to recognising and disclosing information
about deferred tax assets and liabilities related to Pillar Two income taxes,
as provided in the amendments to IAS 12 issued in May 2023.
The table below explains the differences between the expected tax charge at
the weighted average tax rate and the Group's total tax charge.
2024 2023
From continuing operations £m £m
Profit before tax 414 378
Profit before tax multiplied by the weighted average tax rate of 23.0% (2023: 95 85
22.4%)
- Permanent differences 8 4
- Non-taxable income (4) (4)
- Prior year items 2 (4)
- Derecognition/(recognition) of deferred tax assets 21 35
- Overseas tax audits and settlements 2 1
- Taxes on undistributed earnings 1 2
- Acquisition and integration costs 3 2
- Net monetary loss on hyperinflation 3 9
- Pillar Two income taxes 2 -
- Disposal of businesses (6) -
- Tax rate changes 2 -
Total tax charge 129 130
b) Factors affecting the tax expense of future years
The Group's future tax charge, and effective tax rate, could be affected by
several factors including; the resolution of audits and disputes, changes in
tax laws or tax rates, repatriation of cash from overseas markets to the UK,
the ability to utilise brought forward losses and business acquisitions and
disposals. In addition, a change in profit mix between low and high taxed
jurisdictions will impact the Group's future tax charge.
The utilisation of brought forward tax losses or the recognition of deferred
tax assets associated with such losses may also give rise to tax charges or
credits. The recognition of deferred tax assets, particularly in respect of
tax losses, is based upon an assessment of whether it is probable that there
will be sufficient and suitable taxable profits in the relevant legal entity
or tax group against which to utilise the assets in the future. Judgement is
required when determining probable future taxable profits. In the event that
actual taxable profits are different to those forecast, the Group's future tax
charge and effective tax rate could be affected.
The Group has published its approach to tax on www.inchcape.com covering its
tax strategy and governance framework in accordance with Schedule 19 Finance
Act 2016.
2024 2023
£m £m
Profit for the period 435 283
Non-controlling interests (14) (13)
Basic earnings 421 270
Profit for the year from discontinued operations (150) (35)
Basic earnings from continuing operations attributable to owners of the parent 271 235
Adjusting items 20 79
Adjusted earnings from continuing operations attributable to owners of the 291 314
parent
Basic earnings per share
Basic earnings per share from continuing operations 66.4p 57.1p
Basic earnings per share from discontinued operations 36.7p 8.5p
Total basic earnings per share 103.1p 65.6p
Diluted earnings per share
Diluted earnings per share from continuing operations 65.6p 56.4p
Diluted earnings per share from discontinued operations 36.3p 8.4p
Total diluted earnings per share 101.9p 64.8p
Adjusted earnings per share from continuing operations
Basic Adjusted earnings per share from continuing operations 71.3p 76.3p
Diluted Adjusted earnings per share from continuing operations 70.4p 75.3p
2024 2023
number number
Weighted average number of fully paid ordinary shares in issue during the 409,082,913 412,689,716
period
Weighted average number of fully paid ordinary shares in issue during the
period:
- Held by the Inchcape Employee Trust (794,779) (1,131,983)
Weighted average number of fully paid ordinary shares for the purposes of 408,288,134 411,557,733
basic EPS
Dilutive effect of potential ordinary shares 4,816,968 5,408,280
Adjusted weighted average number of fully paid ordinary shares in issue during 413,105,102 416,966,013
the period for the purposes of diluted EPS
Basic earnings/(loss) per share is calculated by dividing the Basic
earnings/(loss) for the year by the weighted average number of fully paid
ordinary shares in issue during the year, less those shares held by the
Inchcape Employee Trust.
Diluted earnings/(loss) per share is calculated on the same basis as Basic
earnings/(loss) per share with a further adjustment to the weighted average
number of fully paid ordinary shares to reflect the effect of all dilutive
potential ordinary shares. Dilutive potential ordinary shares comprise share
options and other share-based awards.
Basic Adjusted earnings (which excludes adjusting items) is adopted to assist
the reader in providing an additional performance measure of the Group. Basic
Adjusted earnings per share is calculated by dividing the Adjusted earnings
for the year by the weighted average number of fully paid ordinary shares in
issue during the year, less those shares held by the Inchcape Employee Trust.
Diluted Adjusted earnings per share is calculated on the same basis as the
Basic Adjusted earnings per share with a further adjustment to the weighted
average number of fully paid ordinary shares to reflect the effect of all
dilutive potential ordinary shares. Information presented for diluted and
diluted adjusted earnings per ordinary share uses the weighted average number
of shares as adjusted for potentially dilutive ordinary shares as
the denominator.
The following dividends were paid by the Group:
2024 2023
£m £m
Final dividend for the year ended 31 December 2023 of 24.3p per share (2022: 100 88
21.3p per share)
Interim dividend for the six months ended 30 June 2024 of 11.3p per share (30 47 40
June 2023: 9.6p per share)
147 128
A final proposed dividend for the year ended 31 December 2024 of 17.2p per
share is subject to approval by shareholders at the Annual General Meeting and
has not been included as a liability as at 31 December 2024. The Group has
sufficient distributable reserves to pay dividends to its ultimate
shareholders. Distributable reserves are calculated on an individual legal
entity basis and the ultimate parent company, Inchcape plc, currently has
adequate levels of realised profits within its retained earnings to support
dividend payments.
At 31 December 2024, Inchcape plc's company-only distributable reserves were
£513m. On an annual basis, the distributable reserve levels of the Group's
subsidiary undertakings are reviewed and dividends paid up to Inchcape plc
where it is appropriate to do so.
8 NOTES TO THE STATEMENT OF CASH FLOWS
A. Reconciliation of cash generated from operations
2024 2023
£m £m
Cash flows from operating activities
Operating profit - continuing operations 562 570
Operating profit - discontinued operations 6 49
Adjusting items 22 50
Amortisation including non-adjusting impairment charges 9 11
Depreciation of property, plant and equipment including non-adjusting 44 61
impairment charges
Depreciation of right-of-use assets 76 81
Profit on disposal of property, plant and equipment and intangible assets (1) (16)
Gain on changes in right-of-use assets (3) -
Share-based payments charge 18 15
Decrease/(increase) in inventories 311 (251)
Increase in trade and other receivables (121) (9)
Increase in trade and other payables 13 415
Decrease in provisions (20) (1)
Pension contributions more than pension charge for the period - (1)
Increase in interest in leased vehicles (8) (18)
Payments in respect of operating adjusting items (36) (57)
Other non-cash items 1 1
Cash generated from operations 873 900
B. Net debt reconciliation
Liabilities from financing activities Assets
Borrowings Leases Sub-total Cash/bank Total
£m
£m
£m
overdrafts
net debt
£m
£m
Net debt at 1 January 2023 (1,428) (499) (1,927) 1,050 (877)
Cash flows 412 87 499 (400) 99
Acquisitions (23) (11) (34) (146) (180)
Period adjustments (7) (1) (8) 9 1
Disposals - - - 1 1
New lease liabilities - (37) (37) - (37)
Other non-cash movements (6) - (6) - (6)
Foreign exchange adjustments 11 21 32 (74) (42)
Net debt at 1 January 2024 (1,041) (440) (1,481) 440 (1,041)
Cash flows 484 81 565 (372) 193
Acquisitions - - - 5 5
Disposals - 98 98 391 489
New lease liabilities - (62) (62) - (62)
Other non-cash movements (4) (1) (5) - (5)
Foreign exchange adjustments 5 22 27 (98) (71)
Net debt at 31 December 2024 (556) (302) (858) 366 (492)
Net debt is analysed as follows:
2024 2023
£m £m
Cash at bank and short term deposits as per the statement of financial 549 689
position
Borrowings - disclosed as current liabilities (195) (652)
Add back: amounts treated as debt financing (see below) 12 403
Cash and cash equivalents as per the statement of cash flows 366 440
Debt financing
Borrowings - disclosed as current liabilities and treated as debt financing (12) (403)
(see above)
Borrowings - disclosed as non-current liabilities (544) (638)
Lease liabilities (302) (440)
Debt financing (858) (1,481)
Net debt (492) (1,041)
Add back: lease liabilities 302 440
Adjusted net debt (190) (601)
a) 2024 Disposals and discontinued operations
On 1 August 2024 the Group completed the sale of its UK Retail operations to
Group 1 Automotive UK Limited, a wholly-owned subsidiary of Group 1
Automotive, Inc. for a cash consideration of £345m.
The UK Retail operation is reported in the current period as a discontinued
operation. Financial information relating to the discontinued operation for
the period to the date of disposal is set out below.
Financial performance and cash flow information
The financial performance and cash flow information presented below is for the
seven months ended 31 July 2024.
2024 2023
£m £m
Revenue 1,199 2,065
Expenses (1,193) (2,016)
Operating profit 6 49
Finance costs (9) (14)
Profit before tax (3) 35
Tax 7 -
Profit after tax of discontinued operations 4 35
Gain on disposal 146 -
Profit from discontinued operation 150 35
2024 2023
£m £m
Net cash inflow from operating activities 6 30
Net cash outflow from investing activities (10) (15)
Net cash outflow from financing activities (3) (7)
Net (decrease)/increase from cash generated from discontinued operations (7) 8
2024
£m
Disposal proceeds 345
Settlement of intercompany facility 63
Disposal costs (12)
Net assets disposed of (250)
Gain on disposal 146
2024
£m
Total consideration, net of disposal costs paid 396
Consideration outstanding (4)
Cash & cash equivalents disposed of (20)
Net cash inflow on disposal of business 372
FCA review of Motor Finance commission
In January 2024, the FCA announced a review into historical motor finance
commission arrangements. This investigation is ongoing. In the meantime, there
have also been a number of relevant court decisions with the Supreme Court
expected to deliver a definitive statement of the law following a hearing
listed for April 2025. We look forward to the outcome of the review, and of
the Supreme Court hearing, and the clarity that this will bring for customers,
lenders and dealers. Following the Group's disposal of its UK business, the
Group's potential exposure to this matter arises from, and is limited to, the
terms of the indemnity that it has given to the buyer of that business. It
remains possible, though highly uncertain, that the Group may become liable to
make certain payments under the terms of that indemnity. However, it is not
currently practicable to estimate the quantum or timing of any such outflow
given the inherent uncertainties associated with the court process and the
s166 review.
In December 2024, the Group completed the sale of its non-genuine parts
business in Chile for £30m, resulting in a £6m gain on disposal. The net
gain, which has been classified as an adjusting item (see note 3), includes
disposal costs and a gain relating to the recycling of cumulative exchange
differences previously recognised in other comprehensive income.
b) 2023 Acquisitions
During the year, net cash inflows of £5m were received as purchase price
adjustments were finalised in relation to acquisitions which completed in the
second half of 2023. The accounting standards allow a period of up to a year
to finalise the accounting for an acquisition. During 2024, acquisition
adjustments were made, in relation to businesses acquired in 2023, which,
combined with purchase price adjustments, had the net effect of decreasing
goodwill by £1m. As the acquisition adjustments were not material, the prior
year statement of financial position has not been restated.
10 FOREIGN CURRENCY TRANSLATION
The main exchange rates used for translation purposes are as follows:
Average rates Year-end rates
2024 2023 2024 2023
Australian dollar 1.94 1.88 2.02 1.87
Bolivian bolivar(1) 12.43 8.60 14.24 8.83
Chilean peso 1,209.30 1,044.70 1,252.30 1,130.41
Ethiopian birr(2) 157.95 71.84 157.95 71.84
Euro 1.18 1.15 1.21 1.15
Hong Kong dollar 9.99 9.75 9.75 9.98
Singapore dollar 1.71 1.67 1.71 1.68
US dollar 1.28 1.25 1.26 1.28
1. In 2024, a parallel rate has been used due to limitations in accessing
currency at official rates of exchange.
2. In 2024, the results for Ethiopia are translated at the closing rate as
required by IAS 21 The Effects of Changes in Foreign Exchange Rates for
hyperinflationary foreign operations.
11 EVENTS AFTER THE REPORTING PERIOD
On 4 March 2025, the Board approved a £250m share buyback programme which
will commence on 4 March 2025 and is expected to conclude within the next 12
months.
The Group assesses its performance using a variety of alternative performance
measures which are not defined under International Financial Reporting
Standards. These provide insight into how the Board and Executive Committee
monitor the Group's strategic and financial performance, and provide useful
information on the trends, performance, and position of the Group.
The Group's income statement and segmental analysis identify separately
adjusted measures and adjusting items. These adjusted measures reflect
adjustments to IFRS measures. The Directors consider these adjusted measures
to be an informative additional measure of the ongoing trading performance of
the Group. Adjusted results are stated before adjusting items and on a
continuing operations basis.
Adjusting items can include gains or losses on the disposal of businesses,
restructuring of businesses, acquisition costs, asset impairments and the tax
effects of these items. Adjusting items excluded from adjusted results can
evolve from one financial period to the next depending on the nature of
adjusting items or one-off activities.
Constant currency
Some comparative performance measures are translated at constant exchange
rates, called 'constant currency' measures. This restates the prior period
results at a common exchange rate to the current period and therefore excludes
the impact of changes in exchange rates used for translation.
Performance measure Definition Why we measure it
Adjusted gross profit Gross profit before adjusting items. A key metric of the direct profit contribution from the Group's revenue
streams (e.g. Vehicles
Refer to the consolidated income statement
and Aftersales).
Adjusted operating profit Operating profit before adjusting items. A key metric of the Group's business performance.
Refer to the consolidated income statement.
Adjusted operating margin Adjusted operating profit divided by revenue. A key metric of operational efficiency, ensuring that we are leveraging global
scale to translate sales growth into profit.
Adjusted profit before tax Represents the profit made after operating and interest expense excluding the A key driver of delivering sustainable and growing earnings to shareholders.
impact of adjusting items and before tax is charged.
Refer to consolidated income statement.
Adjusted earnings before interest, tax, depreciation and amortisation Represents the earnings before interest expense, taxation, depreciation and One of the key measures used in monitoring the Group's leverage and capital
amortisation expenses, and excluding the impact of adjusting items. allocation.
Adjusting items Items that are charged or credited in the consolidated income statement which The separate reporting of adjusting items helps provide additional useful
are material and non-recurring in nature. Refer to note 3. information regarding the Group's business performance and is consistent with
the way that financial performance is measured by the Board and the Executive
Committee.
Adjusted earnings Represents profit after tax, excluding the impact of adjusting items and A key driver of delivering sustainable and growing earnings to shareholders.
non-controlling interest.
Refer to consolidated income statement.
Adjusted earnings per share Represents earnings per share excluding the impact of adjusting items. Refer A measure useful to shareholders and investors to understand the earnings
to note 6. attributable to shareholders without the impact of adjusting items.
Ratio of adjusted net operating expenses to revenue Adjusted net operating expenses expressed as a proportion of revenue. A measure of the net overheads of the Group with reference to Group revenue.
Net capital expenditure Cash outflows from the purchase of property, plant and equipment and A measure of the net amount invested in operational facilities in the period.
intangible assets less the proceeds from the disposal of property, plant and
equipment and intangible assets.
Free cash flow and free cash flow from continuing operations Net cash flows from operating activities, before adjusting cash flows, less A key driver of the Group's ability to 'Invest to Accelerate Growth' and to
normalised net capital expenditure and dividends paid to non-controlling make distributions to shareholders.
interests. Free cash flow from continuing operations is derived by deducting
free cash flow attributable to discontinued operations from total free cash
flow.
Free cash flow conversion Free cash flow divided by adjusted profit after tax. A key driver of the Group's ability to 'Invest to Accelerate Growth' and to
make distributions to shareholders.
Return on capital employed (ROCE) Operating profit (before adjusting items) divided by the average of opening ROCE is a measure of the Group's ability to drive better returns for investors
and closing capital employed, where capital employed is defined as net assets on the capital we invest.
add net debt/less net funds.
Net (debt)/funds Cash and cash equivalents less borrowings and lease liabilities adjusted for A measure of the Group's net indebtedness that provides an indicator of the
the fair value of derivatives that hedge interest rate or currency risk on overall balance sheet strength.
borrowings. Refer to note 8.
Adjusted (net debt)/net cash Cash and cash equivalents less borrowings adjusted for the fair value of A measure of the Group's net indebtedness that provides an indicator of the
derivatives that hedge interest rate or currency risk on borrowings and before overall balance sheet strength and is widely used by external parties.
the incremental impact of IFRS 16 lease liabilities. Refer to note 8.
Leverage Adjusted net debt divided by adjusted earnings before interest, tax, A measure of the Group's net indebtedness with reference to adjusted
depreciation, and amortisation. underlying earnings.
Constant currency % change Presentation of reported results compared to prior period translated using A measure of business performance which excludes the impact of changes in
constant rates of exchange. exchange rates used for translation.
Organic revenue growth Organic revenue growth is defined as the change in revenue adjusted for the Organic revenue growth presents performance on a comparable basis, excluding
impact of business acquisitions and disposals and currency translation the impact of foreign currency translation and the impact of acquisition and
effects, with prior year figures converted with current year exchange rates. disposals in the period. Organic revenue growth is a measure of underlying
business performance and the Group's ability to grow other than through
Organic revenue growth: acquisitions.
• excludes revenue from businesses acquired in the current year;
• includes revenue from businesses acquired in the prior year from the
anniversary of the date of acquisition;
• excludes revenue from businesses disposed of on a pro rata basis;
and
• includes revenue from distribution contracts acquired together with
the impact of arrangements where the Group no longer acts as the distributor.
APMs: Reconciliation of statement of comprehensive income measures
2024 2023
Adjusted profit before tax (from continuing operations) £m £m
Gross Profit 1,606 1,660
Add back: Adjusting items charged to gross profit - -
Adjusted Gross Profit from continuing operations 1,606 1,660
Less: Segment operating expenses (1,022) (1,040)
Adjusted Operating Profit from continuing operations 584 620
Less: Adjusting items in operating expenses (22) (50)
Operating Profit 562 570
Less: Net Finance Costs and JV profits/losses (148) (192)
Profit Before Tax 414 378
Add: Total adjusting Items 30 89
Adjusted profit before tax from continuing operations 444 467
Tax on adjusted profit (139) (140)
Adjusted profit after tax from continuing operations 305 327
2024 2023
Ratio of adjusted net operating expenses to revenue £m £m
Revenue 9,263 9,382
Adjusted net operating expenses 1,022 1,040
Ratio of adjusted net operating expenses to revenue 11.0 % 11.1 %
APMs: Reconciliation of statement of cash flows measures
2024 2024 2023 2023
Free cash flow (from continuing operations) £m £m £m £m
Net cash generated from total operating activities 586 593
Add back: Payments in respect of adjusting items 36 57
Net cash generated from operating activities, before adjusting items 622 650
Purchase of property, plant and equipment (76) (88)
Purchase of intangible assets (3) (5)
Proceeds from disposal of property, plant and equipment 9 31
Net capital expenditure (70) (62)
Net payment in relation to leases (80) (84)
Dividends paid to non-controlling interests (17) (6)
Free cash flow 455 498
Add/(less): Free cash outflow/(inflow) from discontinued operations 7 (6)
Free cash flow from continuing operations 462 492
APMs: Reconciliation of statement of financial position measures
2024 2023
Return on capital employed (from continuing operations) £m £m
Adjusted operating profit 584 620
Net assets 1,474 1,620
Less: Net assets from discontinued operations - (224)
Net assets from continuing operations 1,474 1,396
Add: net debt 492 1,041
Less: net debt from discontinued operations - (58)
Capital employed - continuing operations 1,966 2,379
Effect of averaging 207 (108)
Average capital employed 2,173 2,271
Return on capital employed 26.9 % 27.3 %
2024 2023
Adjusted net debt and leverage £m £m
Net debt 492 1,041
Less: lease liabilities (302) (440)
Adjusted net debt 190 601
Adjusted earnings before interest, tax, depreciation and amortisation 634 738
Leverage 0.3 0.8
2024 2023
Adjusted earnings per share (from continuing operations) £m £m
Adjusted profit after tax 305 327
Less: non-controlling interests (14) (13)
Adjusted earnings 291 314
Weighted average number of shares (m) 408 412
Diluted effect (m) 5 5
Basic adjusted earnings per share 71.3p 76.3p
Diluted adjusted earnings per share 70.4p 75.3p
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. END FR LXLLBEXLZBBZRecent news on Inchcape
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