REG - Inchcape PLC - Half-year Report
Tue 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250729:nRSc8880Sa&default-theme=true
RNS Number : 8880S Inchcape PLC 29 July 2025
Inchcape plc, the leading global automotive distributor, announces its interim
results for the six months to 30 June 2025
Executing Accelerate+ strategy, FY 2025 guidance reiterated
• Delivering in a fast-moving tariff situation, with organic revenue down
(3)%, against Inchcape TIV* down (2)%:
o Robust performance, against a mixed market backdrop, with revenue of
£4.3bn, down (4)% in constant currency, and (9)% on a reported basis
§ Organic revenue down(1,2) (3)%, with improving quarterly sequential organic
revenue performance in H1
§ (1)% impact from disposal of non-core retail asset in the Americas and
translational FX impact of (5)% on reported revenue
o Adjusted operating margins(2) of 5.7% (H1 2024: 6.3%) supported by
robust gross margins and cost discipline
o Adjusted PBT(2) down (4)% in constant currency, tracking revenue
performance, down (12)%, on a reported basis, to £200m
§ Statutory PBT down (5)% to £186m, statutory total profit flat at £129m
o Adjusted basic EPS(2) up 2% to 35.5p, supported by share buyback
§ Reported basic EPS up 16% to 32.4p
o Balance sheet remains strong, with adjusted net debt(2) of £374m (FY
2024: £190m, H1 2024: £524m) and leverage at 0.6x (FY 2024: 0.3x, H1 2024:
0.7x), against a FY 2024 position which included the impact of the sale of the
UK retail business, and also reflecting:
§ Free cash flow(2) generation of £72m (H1 2024: £226m) with working
capital outflow to support supply phasing
§ Shareholder returns amounted to £220m (H1 2024: £100m)
§ Strong ROCE(2) of 27% (H1 2024: 28%)
• Accelerate+ strategy delivering shareholder value - driving scale and
diversification:
o Nine distribution contract wins in H1 2025, with one immaterial
contract exit
o Capital allocation progress, with on-going commitment to share buybacks
§ c.£150m of current £250m programme completed
§ c.10% of Inchcape's share capital re-purchased over the last 12 months
o Bolt-on acquisition of Askja in Iceland - an exciting new market for
Inchcape
§ Leading automotive distributor, with 16% market share
§ Further diversifies and scales Inchcape's geographic footprint and OEM
portfolio
o Interim dividend per share of 9.5p (H1 2024: 11.3p)
• FY 2025 outlook - reiterated:
o Continue to expect another year of growth, at prevailing currency rates**,
including impact of tariffs
o Stronger H2 2025 growth underpinned by:
§ Product launches - on track with robust demand
§ On-going focus on managing costs, inventory and working capital, with
further optimisation of the Group's retail network
o Higher EPS growth, relative to profit growth:
§ Driven by operating performance and capital allocation
§ In-line with medium term guidance of >10% EPS CAGR
Duncan Tait, Group CEO, commented:
"Against a fast-moving tariff situation, Inchcape delivered robust results for
H1 2025. We continued to execute Accelerate+, further diversifying our
business across geographies and strengthening our OEM partnerships,
consolidating our position as the leading global independent automotive
distributor. We remain focussed on driving growth and value for shareholders,
with our first acquisition since 2023, entering an exciting new market and
broadening our range of OEM relationships, and our on-going commitment to
share buybacks."
"We remain excited about the future for Inchcape. Our Accelerate+ strategy
will help us to deliver another year of growth in FY 2025 with our confidence
growing about the second half of the year. We continue to target >10% EPS
CAGR over the medium term, supported by our clear capital allocation policy,
our market leadership position, our diversified, scaled and highly cash
generative business model, our on-going focus on cost discipline and inventory
management and our highly differentiated technology platform."
H1 2025 H1 2024 % change % change % change
constant FX(2)
organic(1)
reported
Key financials (continuing operations)
Revenue £4,320m £4,725m (9) % (4) % (3) %
Adjusted Operating Profit(2) £247m £299m (17) % (12) %
Adjusted Operating Margin(2) 5.7 % 6.3 % (60)bps (50)bps
Adjusted Profit Before Tax(2) £200m £226m (12) % (4) %
Adjusted Basic EPS(2) 35.5p 34.7p 2 %
Dividend Per Share 9.5p 11.3p (16) %
Free Cash Flow(2) £72m £226m (68) %
Reported financials
Operating Profit (continuing operations) £233m £276m (16) %
Profit Before Tax (continuing operations) £186m £195m (5) %
Total profit for the period £129m £129m - %
Basic EPS (continuing operations) 32.4p 27.9p 16 %
Net cash generated from operating activities £112m £283m (60) %
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 14
APMs
2. These measures are Alternative Performance Measures, see Note 14
Results presentations
A webcast presentation for analysts and investors will be held today, Tuesday
29(th) July 2025, at 08:30 BST.
Conference call details (UK wide): Dial-in details: +44 (0) 33 0551 0200; Toll
Free: 0808 109 0700
Password (if prompted): Quote "Inchcape Half Year 2025" when prompted by the
operator.
Webcast details: To register for the webcast of the event please follow this
link (https://brrmedia.news/INCH_HY_2025) . A replay of the analyst
presentation will be available via the Company's website, www.inchcape.com
(file:///C%3A/Users/finn.lawrence/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QNPKNXC8/www.inchcape.com)
later today.
Management will also be hosting a live interaction presentation for investors
on the Engage Investor platform on Monday 4(th) August 2025, 12:00 BST.
Inchcape plc welcomes all current shareholders and interested investors 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://engageinvestor.news/INCH_IPAug25) .
Financial calendar
Ex-dividend date for 2025 interim dividend 7 August 2025
Record date 8 August 2025
Last election date 14 August 2025
Payment date 5 September 2025
Q3 trading update 23 October 2025
Contacts
Inchcape plc (investor enquiries):
Rob Gurner +44 (0)7825 189 088 investors@inchcape.com
Rachel Masser
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. Our ambition is to deliver
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 16,000 people globally.
Inchcape has hosted a series of webinars as part of the "In the Driving Seat"
series, to provide investors and analysts with a further understanding of the
dynamics of the Group's Distribution commercial model, Accelerate+ strategy
and a deep dive on our regions. Recordings of these webinars 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, adjusted
operating profit and adjusted profit before tax in constant currency, thereby
isolating the impact of translational exchange rate effects.
Operational review
Key performance indicators
Key financials (continuing operations) H1 2025 H1 2024 % change % change % change
constant FX(2)
organic(1)
reported
Revenue £4,320m £4,725m (9) % (4) % (3) %
Adjusted Operating Profit(2) £247m £299m (17) % (12) %
Adjusted Operating Margin(2) 5.7 % 6.3 % (60)bps (50)bps
Adjusted Profit Before Tax(2) £200m £226m (12) % (4) %
Free Cash Flow(2) £72m £226m (68) %
Return on Capital Employed(2) 27 % 28 % (100)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 14 APMs
2. These measures are Alternative Performance Measures, see Note 14
H1 2025 results - performance review
Inchcape continued to execute against its Accelerate+ strategy during H1 2025,
against a fast-moving tariff situation, with improving quarterly sequential
organic revenues, delivering a robust performance, against a mixed market
backdrop.
Group revenue of £4.3bn, was down by (4)% in constant currency, and (3)%
organically, driven by lower market volumes and price / mix headwinds. After
translational currency headwinds of (5)%, revenues were down (9)% on a
reported basis.
Reflecting the deleveraging impact of lower revenues, adjusted operating
profit(2) was down (12)% in constant currency, to £247m, with adjusted
operating margins(2) of 5.7%. After (5)% translational currency headwinds,
reported adjusted operating profit was down (17)% and reported operating
profit was down (16)%.
Adjusted net finance costs(2) reduced to £48m (H1 2024: £74m), driven by the
impact of efficient working capital management, which drove lower average net
debt and higher interest income in the Americas from improved cash balances,
as well as lower interest rates.
Adjusted profit before tax(2) was down (4)% on a constant currency basis,
tracking revenue performance, with (8)% translational currency headwinds.
Adjusted basic EPS(2) was up 2% at 35.5p, mainly as a result of a reduced
number of shares in issue, driven by share buybacks.
Pre-tax adjusting items amounted to an expense of £14m (H1 2024: £31m). This
was primarily driven by one-off costs related to acquisition and integration
costs of £4m (H1 2024: £23m), restructuring costs of £6m (H1 2024: nil),
and adjustments in relation to the finalisation of the 2024 disposal of the
non-genuine spare parts business in Chile of £4m (H1 2024: nil). After
adjusting items, reported profit before tax was £186m (H1 2024: £195m).
Free cash flow(2) generation was £72m (H1 2024: £226m), representing a
conversion of adjusted profit after tax to free cash flow of 51% (H1 2024:
149%). This measure was impacted by a working capital outflow of £53m (H1
2024: inflow £82m), to support supply phasing, as the Group increased
inventory from certain OEMs to mitigate planned production outages due to
assembly line upgrades. Consequently, inventory increased to £2,149m (FY
2024: £1,935m). The Group continues to expect to deliver PAT / FCF
conversion of c.100% for FY 2025, in line with its Medium Term Targets.
As at 30 June 2025, Group adjusted net debt(2) amounted to £374m, (excluding
lease liabilities). Free cash flow of £72m was offset by cash outflows of
£(220)m relating to dividends and share buybacks, and £(36)m relating to FX
and other items. Including lease liabilities, the Group ended the period with
net debt of £656m (FY 2024: net debt of £492m). Group leverage was
approximately 0.6x at 30 June 2025, up from 0.3x at the end of FY 2024.
Return on capital employed(2) during the period was 27%, slightly below H1
2024.
Q2 2025 performance
Q2 2025 Group revenue was £2.2bn, with (3)% organic growth(2), with currency
headwinds of (5)%. This was an improved sequential organic growth rate from Q1
2025, when organic growth was (5)%. This was supported by improving organic
revenue trends in Europe and Africa, as well as APAC.
Strategic overview
During H1 2025, Inchcape continued to develop its position as the leading
global automotive distributor, focusing on expanding in smaller and more
complex markets, as it further diversifies its OEM partner portfolio and
geographic profile.
Inchcape's continued strategic progress is in the context of a (2)% decline in
market volumes in its markets as well as a mixed market backdrop, including
current, fast-moving, tariff dynamics. There is no material direct impact on
the Group's business from the tariff situation, with some indirect disruption
to supply-related logistics, although these are not material in nature.
Consumer demand is weaker in certain Asian markets, particularly in the
premium segment, as an indirect result of the macro-economic uncertainty
created by the tariff situation. The Group continues to proactively and
successfully manage this situation, with discipline on costs and cash,
conservative inventory management, and a proactive and collaborative approach
with our OEM partners.
Further strategic progress, delivering by implementing Accelerate+
With this market context in mind, the Group's Accelerate+ strategy, launched
in FY 2024, has been designed to help scale the business through
value-accretive acquisitions, new distribution contracts and expanding into
adjacent segments. The strategy is also focussed on optimising key elements of
the business to be the most efficient and effective route to market for
Inchcape's OEM partners. By scaling and optimising, the Group aims to deliver
on its goal of achieving 10% market share across its markets.
Accelerate+ is supported by Inchcape's ongoing investment in technology, which
has delivered market-leading capabilities through DXP (Digital Experience
Platform) and DAP (Data Analytics Platform). This technology-based approach
enables smarter decisions and deeper insights to support Inchcape's OEM
partners in each region.
The Group continues to develop a healthy pipeline of value-accretive bolt-on
acquisitions, to help support future growth. In July 2025, Inchcape agreed to
acquire Askja and associated businesses, Iceland's leading automotive
distributor, with 16% market share. Iceland is an exciting new market for
Inchcape, with this bolt-on acquisition further scaling the Group's geographic
footprint and strengthening the Group's OEM partner portfolio, with Askja's
OEM relationships including Mercedes-Benz and Kia (a new OEM partner for
Inchcape).
The Group also continues to target growth through Distribution contract wins.
In H1 2025, Inchcape was awarded nine Distribution contracts, with existing
OEM brands including New Holland in Ethiopia and Kenya, BYD in Lithuania and
Latvia, DFSK in Honduras as well as new partner Smart in Colombia, Uruguay and
Ecuador and Iveco in Hong Kong. Furthermore, Inchcape continues to rationalise
its brand portfolio to optimise our market presence and leverage our
infrastructure in the most efficient way. In H1 2025, the Group mutually
exited an immaterial contract with Komatsu in Ethiopia.
In addition, the Group continues to optimise its retail network, as it did in
H1 2025, with the disposal of various non-core retail assets.
Capital allocation
The Group's capital allocation policy is focussed on paying dividends at 40%
of adjusted basic EPS, a commitment to on-going share buybacks and
value-accretive acquisitions.
During FY 2025 to date, the Group has completed c.£150m of the current £250m
share buyback programme. Including the Group's previous £150m share buyback
programme, completed in January 2025, the Group has re-purchased c.10% of its
shares in issue since August 2024.
The Board is today declaring an interim dividend of 9.5p (H1 2024: 11.3p), in
line with our capital allocation policy of paying dividends at 40% of adjusted
basic EPS. This represents one-third of the total dividend paid from the
previous FY 2024 full year.
FY 2025 guidance reiterated
The Group reiterates its guidance for FY 2025, originally disclosed at its FY
2024 results on 4 March 2025, with another year of growth expected compared to
the prior year, at prevailing foreign exchange rates (based on foreign
exchange rates as at 23 July 2025, there would be a c.£(15)m impact on Group
H2 2025 adjusted PBT from translational currency movements). This guidance
includes the expected impact of tariffs on supply, demand and competitive
environment in Inchcape's markets.
Growth in H2 2025 is expected to be stronger than H1 2025, and will be
underpinned by:
• Product launches across various brands and markets, which are on
track with robust demand already evident and order banks building. These
launches will drive a strong performance in H2 2025 in Australia, Asia and the
Americas; and
• An on-going focus on managing costs, inventory and working capital,
with further optimisation of our retail network.
The Group expects to deliver higher EPS growth, relative to profit growth, in
FY 2025, driven by operating performance and capital allocation. PAT / FCF
conversion for FY 2025 is expected to be c.100%.
Over the medium term, the Group will continue to deliver value for
shareholders, supported by its highly cash generative and capital-light
business model and a disciplined approach to capital allocation. To that end,
through to the end of 2030, the Group expects to generate £2.5 billion in
free cash flow, which will be deployed through disciplined capital allocation
to deliver >10% EPS CAGR.
Operating and financial review
% change % change % change
organic(2)
reported constant FX
H1 2025 H1 2024
Revenue
APAC 1,227 1,495 (18) % (15) % (15) %
Europe & Africa 1,582 1,622 (2) % - % - %
Americas 1,511 1,608 (6) % 1 % 3 %
Total 4,320 4,725 (9) % (4) % (3) %
Adjusted operating profit(1)
APAC 79 116 (32) % (29) %
Europe & Africa 78 85 (8) % (1) %
Americas 90 98 (8) % - %
Total 247 299 (17) % (12) %
Adjusted operating margin(1)
APAC 6.4 % 7.8 % (140)bps (130)bps
Europe & Africa 4.9 % 5.2 % (30)bps -bps
Americas 6.0 % 6.1 % (10)bps (10)bps
Total 5.7 % 6.3 % (60)bps (50)bps
See Note 2 for segmental definitions.
APAC (28% of revenue and 32% of adjusted operating profit) - strong
comparators and weaker premium segment
Market volumes were down (4)%, with Inchcape volumes down (11)%, driven by
product cycles and competitive dynamics, against strong comparators. Organic
revenue declined by (15)%, with a weaker premium segment, particularly in
certain Asian markets, which impacted average selling prices across those
markets. Australia remains resilient. Against strong comparators, adjusted
operating profit(1) was down (29)%, with adjusted operating margins(1), down
(130)bps to 6.4%. This was a consequence of the deleveraging impact of lower
revenues, partially offset by the Group's on-going focus on cost management
across the region. The Group continues to expect this year's performance to be
weighted to H2 2025, supported by new product launches in key markets, which
will help to drive market share gains, with robust demand already evident.
Europe & Africa (37% of revenue and 32% of adjusted operating profit) -
continued underlying market outperformance
Market volumes were down (4)%, against which Inchcape delivered market share
gains in certain markets. Organic revenue was flat, with a sequential
quarterly step-up in growth during the period with some price / mix tailwinds,
off-setting the impact of an inflated comparator, driven by an order bank
unwind. Performance was strong in Southern Europe, with performance also
supported by the on-going maturity of Distribution contracts won over the last
4 years. Africa remained resilient. Against the impact of a substantial order
bank in the prior year, adjusted operating profit(1) was down (1)%, with
adjusted operating margins(1) of 4.9%. This was a robust margin performance,
despite some dilution from new Distribution contracts. For H2 2025, moderate
revenue growth is expected, with margins expected to continue to track above
historic norms. There will also be an initial contribution from the Askja
acquisition in Iceland, which is expected to complete in Q3 2025.
Americas (35% of revenue and 36% of adjusted operating profit) - on-going
improvement in trading and growth
Market volumes were up 5%, while organic revenue increased 3%, with some
supply phasing, driven by the Group's continued disciplined approach to
inventory management across the region, impacting market share. In addition,
H1 2024 revenue included c.£40m of revenue related to a non-core retail
asset, which was sold in 2024. The Chile market remains stable, as was
Inchcape's market share, with the successful replacement of exited brands.
There was very strong growth in key markets, including Colombia and Peru.
Adjusted operating profit(1) was flat, with adjusted operating margins(1) down
(10)bps from H1 2024 to 6.0%. This was supported by a continued focus on
optimising our business through operating efficiency and capital recycling,
with H1 adjusted operating profit including gains on disposal of non-core
retail operations and infrastructure optimisation (see note 8). For H2 2025,
the Group remains cautious regarding an accelerated market recovery and
expects to see the usual H2 skew in the region, supported by new product
launches, with margins expected to remain resilient.
1. Operating profit and operating margin are 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 14 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 income from finance and insurance products; and
• Gross profit attributable to Aftersales: Service and Parts
H1 2025 H1 2024 % change % change
reported constant FX
£m £m
Gross Profit
Vehicles 513 566 (9) % (5) %
Aftersales 220 248 (11) % (5) %
Total 733 814 (10) % (5) %
During the year, we generated 30% of gross profit through Aftersales (H1 2024:
30%).
Other financial items
Adjusting items: During the year, pre-tax adjusting items amounted to an
expense of £14m (H1 2024: £31m). This was primarily driven by one-off costs
related to acquisition and integration of £4m (H1 2024: £23m), restructuring
costs of £6m (H1 2024: £nil) and adjustments in relation to the finalisation
of the 2024 disposal of the non-genuine spare parts business in Chile of £4m
(H1 2024: £nil). After adjusting items, reported profit before tax was
£186m (H1 2024: £195m).
Net financing costs: Adjusted net finance costs reduced to £48m (H1 2024:
£74m), driven by the impact of efficient working capital management, which
drove lower average net debt and higher interest income in the Americas from
improved cash balances, as well as lower interest rates.
Tax: The effective tax rate on adjusted profit before tax is 29.5% (H1 2024:
32.7%), and on statutory profit before tax is 30.6% (H1 2024: 36.4%). The
decrease in the effective tax rate on adjusted profit includes the impact of
changes to profit mix resulting from the evolution of the Group's strategy.
Non-controlling interests: Profits attributable to our non-controlling
interests decreased to £4m (H1 2024: £9m). 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 declared an interim dividend of 9.5p per ordinary
share which will be paid on 5 September 2025 to shareholders on the register
at close of business on 8 August 2025. The Dividend Reinvestment Plan is
available to ordinary shareholders and the final date for receipt of elections
to participate is 14 August 2025.
Capital expenditure: During the first half of 2025, the Group incurred net
capital expenditure of £8m (H1 2024: £32m), consisting of £16m gross
capital expenditure (H1 2024: £36m) and £8m of proceeds from the sale of
property (H1 2024: £4m). This reduction was due to the disposal of the UK
retail business in 2024, which was more capital intensive.
Financing: As at 30 June 2025, the funding structure of the Group is comprised
of a committed syndicated revolving credit facility of £900m (FY 2024:
£900m), sterling Private Placement Loan Notes totalling £140m (FY 2024:
£140m), and a five-year bond of £350m, at a fixed coupon of 6.5%. As at 30
June 2025 the syndicated revolving credit facility was drawn £215m (FY 2024:
£55m). Excluding the Revolving Credit Facility, all of the Group's corporate
debt is fixed rate and is not due to be repaid before May 2027. The Group
continues to operate comfortably within its debt covenants.
Pensions: As at 30 June 2025, the IAS 19 net post-retirement surplus was £14m
(2024: £23m), with the decrease driven largely by lower than expected returns
on scheme assets and liabilities experienced. In line with the funding
programme agreed with the Trustees, the Group did not make any additional cash
contributions to the UK pension schemes in the six months ended 30 June 2025
(H1 2024: £nil). 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
adjusted profit before tax was (8)%, driven by the strengthening of the GBP
across key currencies (see following page for sensitivity analysis) and the
substantial devaluation of the Ethiopian Birr. The impact of foreign
currency translation on the assets and liabilities of the Group's foreign
operations resulted in a loss of £149m (H1 2024: £117m) 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 contributes around 80% of the Group's adjusted
profit before tax.
RISKS
PRINCIPAL BUSINESS RISKS
In Q1 2025 and following the launch of Accelerate+, the Board refreshed the
Group Principal risk profile. These principal risks include Margin Pressure,
Loss of a Material Contract, Macroeconomic and Geopolitical Uncertainty,
Future Skills-Engagement and Retention, Cyber and IT Resilience,
Transformation delivery, HSE, Supply Chain Disruption, EV transition, business
interruption and Legal, Regulatory and Financial compliance.
Arising in the period are changes to global tariff regimes which may disrupt
markets and create uncertainty for our business. Although not currently
directly impacting Inchcape markets and OEMs, tariffs may ultimately increase
the supply chain costs of our OEM partners which could in turn impact Inchcape
our margins and customer base. We are monitoring the evolution of this
geopolitical risk across the group through a Tariff Taskforce, whilst also
continuing to ensure risks to our product portfolio mix are managed including
effective and nimble sales and operational planning.
The Group's risk management systems are designed to support the business in
actively managing risk to achieve business objectives and can only provide
reasonable, but not absolute, assurance against material misstatement or loss.
These systems are also designed to be sufficiently agile to respond to changes
in circumstances such as the consequences of new acquisitions, changes
triggered by new legislation, and significant external events.
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, Smart, Still, Subaru, Suzuki, XCMG
Costa Rica Avatr, Changan, Deepal, JAC, Suzuki
Ecuador Freightliner, Forland, Geely, Mercedes-Benz, Smart, Subaru, Western Star
El Salvador Freightliner, Geely, Mercedes-Benz, Western Star
Guatemala Freightliner, Geely, Mercedes-Benz, Western Star
Honduras DFSK, Freightliner, 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, Smart
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, Iveco, 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 BYD, BMW, BMW Motorrad, Ford, Jaguar, Land Rover, Mazda, MINI
Lithuania BYD, 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, New Holland, Suzuki, Toyota
Kenya(5) BMW, BMW Motorrad, Changan, Jaguar, Land Rover, New Holland
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
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Continuing operations Six months to Six months to
30 Jun 2025 30 Jun 2024
Notes £m £m
Revenue 2 4,320 4,725
Cost of sales (3,587) (3,911)
Gross profit 733 814
Net operating expenses (500) (538)
Operating profit 2 233 276
Share of profit after tax of joint ventures and associates 1 1
Profit before finance and tax 234 277
Finance income 4 36 22
Finance costs 4 (84) (104)
Profit before tax from continuing operations 186 195
Tax 5 (57) (71)
Profit for the year from continuing operations 129 124
Profit from discontinued operations - 5
Total profit for the year 129 129
Profit attributable to:
- Owners of the parent 125 120
- Non-controlling interests 4 9
129 129
Earnings per share from continuing operations attributable to the owners of
the parent
Basic earnings per share (pence) 6 32.4p 27.9p
Diluted earnings per share (pence) 6 31.8p 27.5p
Earnings per share attributable to the owners of the parent
Basic earnings per share (pence) 6 32.4p 29.1p
Diluted earnings per share (pence) 6 31.8p 28.7p
Alternative performance measures
Operating profit from continuing operations 233 276
Adjusting items within net operating expenses: 3 14 23
Acquisition and integration costs 4 23
Disposal of businesses 4 -
Restructuring costs 6 -
Adjusted operating profit from continuing operations 247 299
Share of profit after tax of joint ventures and associates 1 1
Adjusted profit before finance and tax from continuing operations 248 300
Net finance costs (48) (82)
Adjusting items within net finance costs: 3 - 8
Net monetary loss on hyperinflation - 8
Adjusted profit before tax from continuing operations 200 226
Tax on adjusted profit (59) (74)
Adjusted profit after tax from continuing operations 141 152
Adjusted earnings per share from continuing operations
Basic adjusted earnings per share 6 35.5p 34.7p
Diluted adjusted earnings per share 6 34.9p 34.2p
See note 14 on page 34 for further details of alternative performance
measures.
The notes on pages 16 to 38 are an integral part of these condensed
consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months to Six months to
30 Jun 2025 30 Jun 2024
£m £m
Profit for the year 129 129
Other comprehensive income/(expense):
Items that will not be reclassified to the consolidated income statement
Retirement benefit schemes
- net actuarial losses (8) (5)
(8) (5)
Items that may be or have been reclassified subsequently to the consolidated
income statement
Cash flow hedges
- net fair value losses (16) (40)
- tax on cash flow hedges 3 9
Foreign currency translation
Exchange differences on translation of foreign operations (149) (117)
Adjustments for hyperinflation (including tax) - 10
Taxation on hyperinflation adjustments - (1)
(162) (139)
Other comprehensive expense for the year (170) (144)
Total comprehensive expense for the year (41) (15)
Total comprehensive income/(expense) attributable to:
- Owners of the parent (40) (19)
- Non-controlling interests (1) 4
(41) (15)
Total comprehensive income/(expense) attributable to owners of Inchcape plc
arising from:
- Continuing operations (40) (24)
- Discontinued operations - 5
The notes on pages 16 to 38 are an integral part of these condensed
consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2025
As at As at
30 Jun 2025 31 Dec 2024
Notes £m £m
Non-current assets
Intangible assets 1,081 1,156
Property, plant and equipment 562 589
Right-of-use assets 247 271
Investments in joint ventures and associates 19 21
Financial assets at fair value through other comprehensive income 10d 4 4
Trade and other receivables 53 34
Deferred tax assets 96 91
Retirement benefit asset 32 36
2,094 2,202
Current assets
Inventories 2,149 1,935
Trade and other receivables 804 829
Derivative financial instruments 10d 27 48
Current tax assets 61 55
Cash at bank and short-term deposits 8b 569 549
Assets held for sale 20 20
3,630 3,436
Total assets 5,724 5,638
Current liabilities
Trade and other payables (2,871) (2,565)
Derivative financial instruments 10d (33) (47)
Current tax liabilities (60) (70)
Provisions (51) (50)
Lease liabilities 8b (62) (66)
Borrowings 8b (239) (195)
(3,316) (2,993)
Non-current liabilities
Trade and other payables (101) (106)
Provisions (22) (26)
Deferred tax liabilities (229) (246)
Lease liabilities 8b (220) (236)
Borrowings 8b (704) (544)
Retirement benefit liability (18) (13)
(1,294) (1,171)
Total liabilities (4,610) (4,164)
Net assets 1,114 1,474
Equity
Share capital 7 38 40
Share premium 147 147
Capital redemption reserve 7 147 145
Merger reserve 312 312
Other reserves (431) (285)
Retained earnings 813 1,020
Equity attributable to owners of the parent 1,026 1,379
Non-controlling interests 88 95
Total equity 1,114 1,474
The notes on pages 16 to 38 are an integral part of these condensed
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2025
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 2024 42 147 143 312 (63) 940 1,521 99 1,620
Profit for the period - - - - - 120 120 9 129
Other comprehensive expense for - - - - (134) (5) (139) (5) (144)
the period
Total comprehensive income/(expense) for the period - - - - (134) 115 (19) 4 (15)
Hedging gains and (losses) transferred to inventory - - - - 6 - 6 - 6
Share-based payments, net of tax - - - - - 9 9 - 9
Purchase of own shares by the Inchcape Employee Trust - - - - - (7) (7) - (7)
Non-controlling interests on acquisition of subsidiaries - - - - - - - (1) (1)
Dividends:
- Owners of the parent 7b - - - - - (100) (100) - (100)
- Non-controlling interests - - - - - - - (9) (9)
At 30 June 2024 42 147 143 312 (191) 957 1,410 93 1,503
Profit for the period - - - - - 301 301 5 306
Other comprehensive income/(expense) for - - - - (107) (42) (149) 4 (145)
the period
Total comprehensive income/(expense) for the period - - - - (107) 259 152 9 161
Hedging gains and (losses) transferred to inventory - - - - 13 - 13 - 13
Non-controlling interests on acquisition of subsidiaries - - - - - - - 1 1
Share buyback programme (2) - 2 - - (151) (151) - (151)
Share-based payments, net of tax - - - - - 9 9 - 9
Purchase of own shares by the Inchcape Employee Trust - - - - - (7) (7) - (7)
Dividends:
- Owners of the parent 7b - - - - - (47) (47) - (47)
- Non-controlling interests - - - - - - - (8) (8)
At 31 December 2024 40 147 145 312 (285) 1,020 1,379 95 1,474
At 1 January 2025 40 147 145 312 (285) 1,020 1,379 95 1,474
Profit for the period - - - - - 125 125 4 129
Other comprehensive expense for the period - - - - (157) (8) (165) (5) (170)
Total comprehensive income/(expense) for the period - - - - (157) 117 (40) (1) (41)
Hedging gains and (losses) transferred to inventory - - - - 11 - 11 - 11
Share buyback programme (2) - 2 - - (252) (252) - (252)
Share-based payments, - - - - - 5 5 - 5
net of tax
Purchase of own shares by the Inchcape Employee Trust - - - - - (11) (11) - (11)
Dividends:
- Owners of the parent 7b - - - - - (66) (66) - (66)
- Non-controlling interests - - - - - - - (6) (6)
At 30 June 2025 38 147 147 312 (431) 813 1,026 88 1,114
The notes on pages 16 to 38 are an integral part of these condensed
consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months to Six months to
30 Jun 2025 30 Jun 2024
Notes £m £m
Cash generated from operating activities
Cash generated from operations 8a 238 443
Tax paid (81) (80)
Interest received 39 20
Interest paid (84) (100)
Net cash generated from operating activities 112 283
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 1 -
Net cash inflow from sale of businesses 9a 9 -
Purchase of property, plant and equipment (16) (34)
Purchase of intangible assets - (2)
Proceeds from disposal of property, plant and equipment 8 4
Dividends received from joint ventures and associates 1 1
Receipt from finance sub-lease receivables 1 1
Net cash generated from/(used in) investing activities 4 (30)
Cash flows from financing activities
Share buyback programme (154) -
Purchase of own shares by the Inchcape Employee Trust (11) (7)
Cash inflow/(outflow) from revolving credit facility 8b 160 (20)
Net cash outflow from other borrowings 8b (10) (110)
Payment of capital element of lease liabilities 8b (36) (43)
Equity dividends paid 7b (66) (100)
Dividends paid to non-controlling interests (6) (9)
Net cash used in financing activities (123) (289)
Net decrease in cash and cash equivalents 8b (7) (36)
Cash and cash equivalents at beginning of the period 366 440
Effect of foreign exchange rate changes (27) (18)
Cash and cash equivalents at end of the period 332 386
Cash and cash equivalents consist of:
Cash at bank 514 560
Short-term deposits 55 87
Bank overdrafts (237) (267)
Cash and cash equivalents included in disposal groups held for sale 9b - 6
332 386
The notes on pages 16 to 38 are an integral part of these condensed
consolidated financial statements.
NOTES (UNAUDITED)
1 BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Basis of preparation
The condensed consolidated interim financial statements for the period ended
30 June 2025 have been prepared on a going concern basis in accordance with
UK-adopted International Accounting Standard 34 'Interim Financial Reporting'
and the Disclosure and Transparency Rules of the Financial Conduct Authority.
These condensed consolidated interim financial statements should be read in
conjunction with the Annual Report and Accounts 2024, which have been prepared
in accordance with UK-adopted International Financial Reporting Standards
(IFRS) and the Companies Act 2006 applicable to companies reporting under
IFRS.
These condensed consolidated interim financial statements are unaudited but
have been reviewed by the external auditors. The condensed consolidated
interim financial statements in the Interim Report do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006. The
Group's published consolidated financial statements for the year ended 31
December 2024 were approved by the Board of Directors on 3 March 2025 and
delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified and did not
contain an emphasis of matter paragraph or a statement under section 498 of
the Companies Act 2006. The condensed consolidated interim financial
statements on pages 10 to 38 were approved by the Board of Directors on 28
July 2025.
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 £355m was drawn at 30 June 2025. 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 January 2026,
resulting from decreasing consumer demand in response to fiscal tightening and
resulting economic downturns;
• a reduction in reported GBP earnings from July 2025 to December 2026
resulting from the strengthening of sterling relative to other currencies;
• an adverse movement in working capital from January 2026 arising
from a combination of an increase in inventory and a general liquidity
reduction;
• 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 condensed consolidated interim financial
statements.
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 2024 with the exception of the following standards, amendments
and interpretations which have been newly adopted from 1 January 2025:
Newly adopted accounting standards
From 1 January 2025, the following standards become effective in the Group's
consolidated financial statements:
• Amendments to IAS 21 - Lack of exchangeability
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 not early adopted other standards, amendments to standards or
interpretations that have been issued but are not yet effective.
Standards not yet effective
The following standards were in issue but were not yet effective at the
balance sheet date. These standards have not
yet been early adopted by the Group, and will be applied for the Group's
financial years commencing on or after
1 January 2026:
Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of Financial
Instruments
IFRS 18 - Presentation and Disclosure in Financial Statements
IFRS 19 - Subsidiaries without Public Accountability: Disclosures
Annual improvements to IFRS - Volume 11
Management is currently reviewing the new standards to assess the impact that
they may have on the Group's reported position and performance. Management do
not expect that the adoption of the standards listed above will have a
material impact on the financial statements of the Group.
Ethiopia ceases to be a hyperinflationary economy
The Group financial statements included 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 since 2022.
As at 30 June 2025, Ethiopia is no longer considered to be a hyperinflationary
economy and therefore the Group has not recognised any adjustments in respect
of hyperinflation. The Group ceased to apply IAS 29 from the beginning of the
reporting period in which hyperinflation ceased, thus from 1 January 2025.
The Group's consolidated financial statements included the results and
financial position of its Ethiopian operations restated to the purchasing
power or inflationary measuring unit current up until 31 December 2024,
leading to a hyperinflationary loss in respect of monetary items being
reported in finance costs, and treated as an adjusting item from 2022 to 2024.
The results of the Group's Ethiopian operations were translated at the closing
exchange rate, as required by IAS 21 'The Effects of Changes in Foreign
Exchange Rates' for hyperinflationary foreign operations.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of these condensed consolidated interim financial statements
in accordance with generally accepted accounting principles requires the use
of estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Although these estimates
are based on management's best knowledge, actual results may ultimately differ
from those estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis.
The Directors have made a number of estimates and assumptions regarding the
future and made some significant judgements in applying the Group's accounting
policies. The critical accounting judgements and key sources of estimation
uncertainty remain consistent with those presented in the accounting policies
note within the Group's 2024 Annual Report and Accounts. Those that are new or
significant to the preparation of the interim financial statements are
presented below.
Impairment of goodwill and other indefinite life intangible assets
The carrying amount of goodwill and other indefinite life intangible assets is
shown below:
As at 30 Jun 2025 As at 31 Dec 2024
Goodwill Indefinite- Total Goodwill Indefinite- Total
£m
life intangible
£m
£m
life intangible
£m
assets
assets
£m
£m
At 1 January 272 852 1,124 302 929 1,231
Businesses sold - - - (4) - (4)
Acquisition adjustments (see note 9a) - - - (1) - (1)
Impairment (charge)/reversal - - - - 19 19
Derecognition - - - - (5) (5)
Effect of foreign exchange rates (17) (55) (72) (25) (91) (116)
At 30 June/31 December 255 797 1,052 272 852 1,124
Goodwill acquired in a business combination is allocated to the cash
generating units (CGUs) or group of CGUs (hereafter collectively referred to
as 'CGU groups') that are expected to benefit from the synergies associated
with that business combination. Indefinite-life intangible assets, principally
distribution agreements acquired in a business combination,
are also allocated to the CGUs or CGU groups that are expected to benefit from
the cash flows associated with the
relevant agreements.
Indicators of impairment in goodwill and other indefinite-life intangible
assets
In accordance with the Group's accounting policy, goodwill and other
indefinite-life intangible assets are tested at least annually for impairment
and whenever events or circumstances indicate that the carrying amount may not
be recoverable.
In the first half of 2025, the Group carried out an assessment as to whether
any impairment testing is required to be performed for the six months to 30
June 2025. As set out in IAS 36 Impairment of Assets, the assessment involved
the Group reviewing potential indicators of impairment to determine if any of
the Group's assets should be tested.
The review included examining data trends on asset valuations, reviewing
latest macro-economic data including global economic forecasts, reviewing
latest industry data including forecasts of industry volumes and comparing the
Group's results against cash flows used in previously prepared impairment
models and latest forecasts. The conclusion reached from the review performed
was that there was no requirement to test any assets or cash generating units
for impairment for the six-month period to 30 June 2025.
At 31 December 2024, the Group's value in use calculations prepared for the
cash generating units represented by Central America - Suzuki business in the
Americas were sensitive to a change in the key assumptions used. The
recoverable amount calculated for the Central America CGU was £167m. Cash
flows were discounted back to present value using a pre-tax discount rate of
11.7%.
The cash flows used within the impairment model were based on assumptions
which are sources of estimation uncertainty and small movements in these
assumptions could lead to further impairment. Management performed sensitivity
analysis on the key assumptions in the indefinite-life intangible asset
impairment model for Central America - Suzuki using reasonably possible
changes in these key assumptions. The sensitivities were selected based on the
inherent business volatility and the metrics that closely align to the
consequences of climate change risks and opportunities detailed on pages 43 to
49 of the 2024 Annual Report and Accounts.
Increase/ Decrease in value in use Impact on carrying value
(decrease) in assumption
£m £m
Revenue CAGR (%) (1.0%) (21) (8)
Average gross margin (%) (0.5%) (11) -
Pre-tax discount rate (%) 1.0% (25) (12)
Long-term growth rate (%) (0.5%) (8) -
The value in use calculations for the Hino distribution agreement in South
America indicated limited headroom. The cash flows for the Americas - Hino CGU
group are sensitive to any change in assumption, with the timing of resumption
of supply being of particular significance to the cash flow forecasts.
Management performed sensitivity analysis on the key assumptions in the
indefinite-life intangible asset impairment model for Americas - Hino using
reasonably possible changes in key assumptions.
Increase/ Decrease in value in use Impact on carrying value
(decrease) in assumption
£m £m
Supply constraint 1 year (6) (5)
Average gross margin (%) (0.5) % (4) (3)
Pre-tax discount rate (%) 1.0 % (8) (7)
Long-term growth rate (%) (0.5) % (2) (1)
Classification of vehicle funding arrangements
The Group finances the purchase of vehicles using vehicle funding facilities
provided by various lenders including the captive finance companies associated
with brand partners. In assessing whether the liabilities arising under these
arrangements should be classified within trade and other payables rather than
as an additional component of the Group's net debt within borrowings, the
Group considers a number of factors including whether the arrangement is a
requirement of the relationship with the OEM, in relation to specific,
separately identifiable vehicles held as inventory and the duration of the
finance. Each agreement entered into has its own terms and conditions and
determining whether a new or renewed arrangement should be classified within
trade and other payables requires significant management judgement (see note
10c).
Adjusting items
The Directors believe that adjusted profit and earnings per share measures
provide additional useful information to shareholders on the performance of
the business. These measures are consistent with how business performance is
measured internally by the Board and Executive Committee. The operating profit
before adjusting items and profit before tax and adjusting items measures are
not recognised profit measures under IFRS and may not be directly comparable
with such profit measures used by other companies. The classification of
adjusting items requires significant management judgement after considering
the nature and intentions of a transaction. The Group's definitions of
adjusting items are outlined within the Group accounting policies and note 3
provides further details on current year adjusting items and their adherence
to Group policy.
In the period, the Group has reported an aggregate pre-tax adjusting items
expense of £14m (see note 3). The separate reporting of adjusting items helps
provide additional useful information regarding the Group's underlying
business performance and is used by management to facilitate internal
performance analysis. Items that may be considered as adjusting items include
gains or losses on the disposal of businesses, restructuring of businesses,
acquisition and integration costs, asset impairments and the tax effects of
these items. Any reversal of an amount previously recognised as an adjusting
item would also be recognised as an adjusting item in a subsequent period.
Alternative performance measures (APMs)
The consolidated income statement presents only IFRS measures which is in line
with the basis of preparation disclosed in this note. The alternative
performance measures used by the Group are included in note 14. This includes
further information on the definitions, purpose and reconciliation to IFRS
measures.
2 SEGMENTAL ANALYSIS
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.
The Group reports the performance of its reporting segments after the
allocation of central costs. These represent costs of Group functions.
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
Six months to 30 June 2025 £m £m £m £m
Revenue
Total revenue 1,227 1,582 1,511 4,320
Adjusted operating profit from continuing operations 79 78 90 247
Operating adjusting items (14)
Operating profit from continuing operations 233
Share of profits after tax of joint ventures and associates 1
Profit before finance and tax 234
Finance income 36
Finance costs (84)
Profit before tax from continuing operations 186
Tax (57)
Profit for the year from continuing operations 129
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, Australia and Belgium are
presented separately as these comprise more than 10% of the Group's revenue.
Revenue is further analysed as follows:
Six months to 30 June 2025 £m
Chile 671
Australia 491
Belgium 460
Rest of the world 2,698
Group 4,320
APAC Europe & Africa Americas Total
Six months to 30 June 2024 £m £m £m £m
Revenue
Total revenue 1,495 1,622 1,608 4,725
Adjusted operating profit from continuing operations 116 85 98 299
Operating adjusting items (23)
Operating profit from continuing operations 276
Share of losses after tax of joint ventures and associates 1
Profit before finance and tax 277
Finance income 22
Finance costs (104)
Profit before tax from continuing operations 195
Tax (71)
Profit for the year from continuing operations 124
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:
Six months to 30 June 2024 £m
Chile 738
Australia 595
Rest of the world 3,392
Group 4,725
3 ADJUSTING ITEMS
Six months to Six months to
30 Jun 2025
30 Jun 2024
From continuing operations £m £m
Acquisition and integration costs (4) (23)
Restructuring costs (6) -
Loss on disposal of business (see note 9a) (4) -
Total adjusting items in operating profit (14) (23)
Adjusting items in finance costs:
Net monetary loss on hyperinflation - (8)
Total adjusting items before tax (14) (31)
Tax on adjusting items (see note 5) 2 3
Total adjusting items (12) (28)
During the period, operating costs of £4m (2024: £23m) 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 other businesses acquired. The integration
of the Derco group is a multi-year programme, with cumulative costs to date of
£70m, that is expected to complete in the second half of 2025.
Partly driven by the potential medium-term impact of the tariff situation on
the Group's operations, restructuring activity has been undertaken by the
Group and the associated costs have been recognised as an adjusting item in
line with the Group's policy. Restructuring costs have only been recognised
once formal plans are in place and their implementation has commenced or been
announced to those affected. Restructuring costs have also been recognised
in relation to Group-wide transformation projects impacting back-office
operations, including a review of organisational structures, internal
processes and the physical location of certain operations. Execution of the
Group-wide restructuring activities commenced in the first half of the year,
with activities expected to continue into the first half of 2026.
In December 2024, the Group sold its share in its non-genuine spare parts
business in Chile and a gain on disposal of £6m was reported as an adjusting
item. During 2025, following the finalisation of the completion accounts for
the disposal, there was an adjustment of £4m in favour of the buyer. This
adjustment to the sale proceeds has been reported as an adjusting item for
consistency with the amount reported in 2024.
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 six
months ended 30 June 2024 were restated to include the effect of indexation
and the resulting net monetary loss on hyperinflation of £8m was
recognised within net finance costs and reported as an adjusting item. As at
30 June 2025, Ethiopia is no longer considered to be a hyperinflationary
economy and therefore the Group has not recognised any adjustments in respect
of hyperinflation for the six months ended 30 June 2025. The Group ceased to
apply IAS 29 from the beginning of the reporting period in which
hyperinflation ceased, thus from 1 January 2025.
4 NET FINANCE COSTS
Six months to Six months to
30 Jun 2025 30 Jun 2024
From continuing operations £m £m
Interest expense on bank and other borrowings 52 52
Finance costs on lease liabilities 7 9
Interest on inventory financing 25 26
Net monetary loss on hyperinflation (note 3) - 8
Other finance costs - 9
Finance costs 84 104
Bank and other interest receivable (33) (18)
Net interest income on post-retirement plan assets and liabilities (1) (2)
Other finance income (2) (2)
Finance income (36) (22)
Net finance costs 48 82
Analysed as:
Net finance costs excluding adjusting finance costs 48 74
Finance costs reported as adjusting items - 8
Net finance costs 48 82
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. The results and financial
position of Ethiopia for the six months ended 30 June 2024 were restated to
include the effect of indexation and the resulting net monetary loss on
hyperinflation of £8m was recognised within net finance costs and reported as
an adjusting item. As at 30 June 2025, Ethiopia is no longer considered to be
a hyperinflationary economy and therefore the Group ceased to apply IAS 29
from the beginning of the reporting period in which hyperinflation ceased,
thus from 1 January 2025.
5 TAX
Six months to Six months to
30 Jun 2025 30 Jun 2024
From continuing operations £m £m
Current tax - Overseas tax 62 66
- Pillar 2 income taxes 1 2
Adjustments to prior year liabilities - Overseas tax 1 -
Current tax 64 68
Deferred tax (7) 3
Total tax charge 57 71
- Tax charge on profit before adjusting items 59 74
- Tax credit on adjusting items (2) (3)
Total tax charge 57 71
The tax charge for the six months to 30 June 2025 has been calculated by
applying the estimated average annual effective income tax rate for each
jurisdiction in which Inchcape operates to the interim period pre-tax income
of each jurisdiction as required by IAS 34 'Interim Financial Reporting'. Tax
credited on adjusting items has been separately calculated and is disclosed
above. Details of the adjusting items for the period can be found in note 3.
The effective tax rate for the period to 30 June 2025 is 30.6% compared to
36.4% for the same period last year. The effective tax rate on adjusted profit
for the period is 29.5% compared to 32.7% for the same period last year.
The current tax charge for the period to 30 June 2025 includes Pillar 2 top-up
tax of £1m (2024: £2m). Of this, £1m (2024: £1m) is domestic top-up tax
payable in overseas jurisdictions and £nil (2024: £1m) is payable in the
United Kingdom in respect of jurisdictions which have not implemented Pillar 2
legislation.
The total tax charge in the period no longer includes the impact of IAS 29
'Financial Reporting for Hyperinflationary Economies' in relation to the
financial position of Ethiopia (see note 3).
Factors affecting current and future tax charges
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 changes in 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 expense 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.
6 EARNINGS PER SHARE
Six months to Six months to
30 Jun 2025 30 Jun 2024
£m £m
Profit for the period 129 129
Non-controlling interests (4) (9)
Basic earnings 125 120
Profit for the period from discontinued operations - (5)
Basic earnings from continuing operations attributable to owners of the parent 125 115
Adjusting items 12 28
Adjusted earnings from continuing operations attributable to owners of the 137 143
parent
Basic earnings per share
Basic earnings per share from continuing operations 32.4p 27.9p
Basic earnings per share from discontinued operations - 1.2p
Total basic earnings per share 32.4p 29.1p
Diluted earnings per share
Diluted earnings per share from continuing operations 31.8p 27.5p
Diluted earnings per share from discontinued operations - 1.2p
Total diluted earnings per share 31.8p 28.7p
Adjusted earnings per share from continuing operations
Basic Adjusted earnings per share from continuing operations 35.5p 34.7p
Diluted Adjusted earnings per share from continuing operations 34.9p 34.2p
Six months to Six months to
30 Jun 2025 30 Jun 2024
number number
Weighted average number of fully paid ordinary shares in issue during the 386,276,551 413,007,132
period
Weighted average number of fully paid ordinary shares in issue during the
period:
- Held by the Inchcape Employee Trust (629,990) (974,210)
Weighted average number of fully paid ordinary shares for the purposes of 385,646,561 412,032,922
basic EPS
Dilutive effect of potential ordinary shares 7,354,128 6,044,221
Adjusted weighted average number of fully paid ordinary shares in issue during 393,000,689 418,077,143
the period for the purposes of diluted EPS
Basic earnings per share is calculated by dividing the Basic earnings for the
period by the weighted average number of fully paid ordinary shares in issue
during the period, less those shares held by the Inchcape Employee Trust.
Diluted earnings per share is calculated on the same basis as Basic 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. 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 period by the weighted average number of fully paid ordinary shares in
issue during the period, 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.
7 SHAREHOLDERS' EQUITY
A. Issue of ordinary shares
As at 30 June 2025, the issued share capital of the Company was 372,227,910
shares (June 2024: 413,007,132 shares; December 2024: 394,333,172 shares).
During the period, the Group issued £nil (June 2024 - £nil, December 2024 -
£nil) of ordinary shares exercised under the Group's share option schemes.
Share buyback programme
On 4 March 2025, the Group announced a £250m share buyback programme which
was expected to conclude within the next 12 months. During the six months
ended 30 June 2025, the Company repurchased 22,105,262 shares at a cost of
£150m (June 2024: none; December 2024: 18,673,960 shares repurchased in
second half of 2024 at a cost of £147m). The cost of the share buyback has
been charged to retained earnings. An amount of £2m (June 2024: £nil;
December 2024: £2m), equivalent to the nominal value of the cancelled shares,
was transferred to the capital redemption reserve.
The Directors have concluded that as at 30 June 2025, under the terms and
conditions of the buyback contract with the Group's broker, the Group was not
in a position to cancel the obligation arising under the contract.
Accordingly, the Group has recorded a share buyback liability of £102m (June
2024: £nil; December 2024: £nil) for this obligation in accordance with IAS
32 'Financial Instruments: Presentation'. The liability is included within
trade and other payables and reflects the maximum liability for the purchase
of the Company's own shares through to the conclusion of the Group's close
period on 29 July 2025.
B. Dividends
The following dividends were paid to equity holders of the parent:
Six months to Six months to Year to
30 Jun 2025 30 Jun 2024 31 Dec 2024
£m £m £m
Final dividend for the year ended 31 December 2024 of 17.2p per share (2023: 66 100 100
24.3p per share)
Interim dividend for the six months ended 30 June 2024 of 11.3p per share - - 47
(2023: 9.6p per share)
66 100 147
An interim dividend of 9.5p per share for the period ending 30 June 2025 was
approved by the Board on 28 July 2025 and will be paid on 5 September 2025 to
shareholders who are on the register at close of business on 8 August 2025.
The Dividend Reinvestment Plan (DRIP) is available to ordinary shareholders
and the final date for receipt of elections to participate in the DRIP is 14
August 2025.
C. Distributable reserves
Rectification of procedural issue in relation to share buybacks
The Board has recently become aware of a technical issue relating to certain
historic purchases of the Company's shares under its share buyback programmes
in Q4 2024 and Q1 2025. Whilst the directors were satisfied that the Company
had sufficient distributable reserves to support these purchases, certain
procedural requirements under the Companies Act 2006 were not satisfied prior
to the transactions. This issue is technical in nature and does not have any
impact on the Company's current trading, current share repurchases or the
payment of any dividends to shareholders. A circular will be sent to
shareholders on or around 31 July 2025, convening a general meeting to seek
ratification of the relevant share purchases and grant approval for the
Company to enter into related agreements to rectify the position. Full details
will be set out in the circular.
8 NOTES TO THE STATEMENT OF CASH FLOWS
A. Reconciliation of cash generated from operations
Six months to Six months to
30 Jun 2025
30 Jun 2024
£m £m
Cash flows from operating activities
Operating profit - continuing operations 233 276
Operating profit - discontinued operations - 7
Adjusting items 14 23
Amortisation including non-adjusting impairment charges 4 5
Depreciation of property, plant and equipment including non-adjusting 21 25
impairment charges
Depreciation of right-of-use assets 34 40
Profit on disposal of businesses (5) -
Profit on disposal of property, plant and equipment and intangible assets (2) -
Gain on changes in right-of-use assets (1) -
Share-based payments charge 5 9
(Increase)/decrease in inventories (279) 330
Increase in trade and other receivables (25) (99)
Increase/(decrease) in trade and other payables 251 (142)
Decrease in provisions - (6)
Pension contributions less than pension charge for the period 2 -
Increase in interest in leased vehicles (5) (4)
Payments in respect of operating adjusting items (9) (21)
Cash generated from operations 238 443
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 2024 (1,041) (440) (1,481) 440 (1,041)
Cash flows 130 43 173 (36) 137
New lease liabilities - (40) (40) - (40)
Transferred to assets/liabilities held for sale - 60 60 - 60
Other non-cash movements (3) (1) (4) - (4)
Foreign exchange adjustments 4 11 15 (18) (3)
Net debt at 30 June 2024 (910) (367) (1,277) 386 (891)
Cash flows 354 38 392 (336) 56
Acquisitions - - - 5 5
Disposals - 38 38 391 429
New lease liabilities - (22) (22) - (22)
Other non-cash movements (1) - (1) - (1)
Foreign exchange adjustments 1 11 12 (80) (68)
Net debt at 1 January 2025 (556) (302) (858) 366 (492)
Cash flows (150) 36 (114) (17) (131)
Acquisitions - - - 1 1
Disposals - - - 9 9
New lease liabilities - (25) (25) - (25)
Foreign exchange adjustments - 9 9 (27) (18)
Net debt at 30 June 2025 (706) (282) (988) 332 (656)
8 NOTES TO THE STATEMENT OF CASH FLOWS
Net debt is analysed as follows:
As at As at As at
30 Jun 2025 31 Dec 2024 30 Jun 2024
£m £m £m
Cash at bank and short-term deposits as per the statement of financial 569 549 647
position
Cash and cash equivalents included in disposal groups held for sale - - 6
Borrowings - disclosed as current liabilities (239) (195) (559)
Add back: amounts treated as debt financing (see below) 2 12 292
Cash and cash equivalents as per the statement of cash flows 332 366 386
Debt financing
Borrowings - disclosed as current liabilities and treated as debt financing (2) (12) (292)
(see above)
Borrowings - disclosed as non-current liabilities (704) (544) (618)
Lease liabilities (282) (302) (367)
Debt financing (988) (858) (1,277)
Net debt (656) (492) (891)
Add back: lease liabilities 282 302 367
Adjusted net debt (374) (190) (524)
Borrowings disclosed as current liabilities include bank overdrafts held in
cash pooling arrangements which have not been offset in the consolidated
statement of financial position. As at 30 June 2024, this included a £250m
Term Loan that was repaid in August 2024. Bank overdrafts are included within
cash and cash equivalents in the consolidated statement of cash flows.
As at As at As at
30 Jun 2025
31 Dec 2024
30 Jun 2024
Cash at bank 514 458 560
Short-term deposits 55 91 87
Bank overdrafts (237) (183) (267)
Cash and cash equivalents included in disposal groups held for sale - - 6
332 366 386
£23m (31 December 2024: £37m; 30 June 2024: £94m) of cash and cash
equivalents is held in Ethiopia where prior approval is required to transfer
funds abroad, and currency may not be available locally to effect such
transfers.
9 ACQUISITIONS AND DISPOSALS
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. During the first half of
2025, the Group received £4m of deferred consideration relating to the
disposal of its UK Retail operations.
The UK Retail operation was reported as a discontinued operation in 2024.
Financial information relating to the discontinued operation for the year
ending 31 December 2024 is included in note 28a of the Group's 2024 Annual
Report and Accounts.
During the first half of 2025, the Group disposed of retail sites in the
Americas and Europe generating net disposal proceeds of £5m.
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 was classified as an adjusting item, included disposal costs and a
gain relating to the recycling of cumulative exchange differences previously
recognised in other comprehensive income. During 2025, following the
finalisation of the completion accounts for the disposal, an adjustment of
£4m was made in favour of the buyer. This adjustment to the sale proceeds has
been reported as an adjusting item, for consistency with the amount reported
in 2024, and as a net cash outflow from sale of businesses in the consolidated
statement of cash flows.
B. Assets held for sale
As at As at
30 Jun 2025
31 Dec 2024
£m £m
Assets classified as held for sale 20 20
As at 30 June 2025, assets held for sale relate to retail sites in Australia,
the disposal of which is expected to occur in the second half of the year.
10 FINANCIAL RISK MANAGEMENT
A. Financial risk factors
Exposure to financial risks comprising market risks (currency risk and
interest rate risk), funding and liquidity risk and counterparty risk arises
in the normal course of the Group's business.
During the six months to 30 June 2025, the Group has continued to apply the
financial risk management process and policies as detailed in the Group's
principal risks and risk management process included in the Annual Report and
Accounts 2024.
The condensed consolidated interim financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements and further details can be found in note 23 of the Annual
Report and
Accounts 2024.
B. Liquidity risk
As at 30 June 2025, the committed funding facilities of the Group comprised a
syndicated revolving credit facility of £900m (31 December 2024: £900m),
sterling Private Placement Loan Notes totalling £140m (31 December 2024:
£140m) and a five-year bond of £350m (31 December 2024: £350m). As at 30
June 2025, £215m of the £900m syndicated revolving credit facility was drawn
(31 December 2024: £55m).
The £350m public bond is held at amortised cost and had a fair value of
£361m as at 30 June 2025 based on quoted prices. The £140m Private Placement
Loan Notes are also held at amortised cost and had a fair value of £138m.
Private Placement Loan Notes of £70m were repaid in May 2024, reducing the
total from £210m to £140m.
The Private Placement borrowings 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 Group is
required to maintain a ratio of not less than three to one and was compliant
with this covenant as at 30 June 2025.
C. Vehicle funding arrangements
The Group finances the purchase of new vehicles for sale and a portion of used
vehicle inventories using vehicle funding facilities provided by various
lenders including the captive finance companies associated with brand
partners. Such arrangements generally are uncommitted facilities and have a
maturity of 180 days or less. Amounts due under these vehicle funding
arrangements are included within trade and other payables in the consolidated
statement of financial position. Related cash flows are reported within cash
flows from operating activities in the consolidated statement of cash flows.
As at 30 June 2025, the total amount outstanding under such arrangements was
£1,864m (31 December 2024: £1,582m).
Vehicle funding facilities are subject to SONIA (or similar) interest rates.
The interest incurred under these arrangements is included within finance
costs in the consolidated income statement and reported as interest on
inventory financing (see note 4). Related cash flows are reported as interest
paid in the consolidated statement of cash flows.
D. Fair value measurements
In accordance with IFRS 13, disclosure is required for financial instruments
that are measured in the consolidated statement of financial position at fair
value. There are no non-recurring fair value measurements. This requires
disclosure of fair value measurements by level for the following fair value
measurement hierarchy:
• quoted prices in active markets (level 1);
• inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly (level 2); or
• inputs for the asset or liability that are not based on observable
market data (level 3).
The following table presents the Group's assets and liabilities that are
measured at fair value:
As at 30 June 2025 As at 31 December 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Assets
Derivatives used for hedging - 27 - 27 - 48 - 48
Financial assets at fair value through other comprehensive income - - 4 4 - - 4 4
- 27 4 31 - 48 4 52
Liabilities
Derivatives used for hedging - (33) - (33) - (47) - (47)
- (33) - (33) - (47) - (47)
Level 1 represents the fair value of financial instruments that are traded in
active markets and is based on quoted market prices at the end of the
reporting period.
The fair value of financial instruments that are not traded in an active
market (level 2) is determined by using valuation techniques which include the
present value of estimated future cash flows. These valuation techniques
maximise the use of observable market data where it is available and rely as
little as possible on entity specific estimates.
Level 3 primarily represents the Group's equity interest in Hino Motors
Manufacturing Company SAS. Fair value is based on discounted free cash flows,
using the projection of annual income and expenses mainly based on historical
financial figures.
Derivative financial instruments are carried at their fair values. The fair
value of forward foreign exchange contracts and foreign exchange swaps
represents the difference between the value of the outstanding contracts at
their contracted rates and a valuation calculated using the spot rates of
exchange and prevailing forward interest rates at 30 June 2025.
The Group's derivative financial instruments comprise the following:
Assets Liabilities
As at As at 31 December 2024 As at As at 31 December 2024
30 Jun 2025 30 Jun 2025
£m £m £m £m
Forward foreign exchange contracts 27 48 (33) (47)
27 48 (33) (47)
11 OTHER DISCLOSURES
A. Related Parties
There have been no material changes to the principal subsidiaries and joint
ventures as listed in the Annual Report and Accounts for the year ended 31
December 2024. All related party transactions arise during the ordinary course
of business and are on an arm's length basis.
There were no material transactions or balances between the Group and its key
management personnel or other related parties, including entities connected to
Non-Executive Directors, during the six months to 30 June 2025.
B. Contingencies
Franked Investment Income Group Litigation Order
Inchcape is a participant in an action in the United Kingdom against HMRC in
the Franked Investment Income Group Litigation Order ("FII GLO"). As at 30
June 2025, there were 15 corporate groups in the FII GLO. As previously
reported, the High Court held in February 2024, that participants must have
submitted their claims before 6 June 2006 in order to recover the unlawful tax
for the entire period of their claims. Inchcape submitted a claim on 25
November 2003 and the High Court's judgment means that Inchcape's claim was
submitted in time and covers the entire period of its claim. However, HMRC
appealed the High Court's decision. The appeal was heard by the Court of
Appeal in May 2025 and its judgement is expected later this year.
In view of the significant uncertainty about the eventual outcome of the
appeals process, Inchcape has not recognised any amount in respect of its
claim to a refund of this tax.
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 its ruling in the leading case against lenders on 1 August
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 s166 review.
Virgin Media Limited and NTL Pension Trustees II Limited
The Group is aware of a case involving Virgin Media Limited and NTL Pension
Trustees II Limited relating to the validity of certain historical pension
changes which could potentially lead to additional liabilities for some
pension schemes and sponsors although there is uncertainty as to how the
ruling would be applied in practice. The Group has undertaken an initial
risk-based assessment of any potential impact on the Inchcape Motors Pension
Scheme (IMPS) and the Group. The assessment has, to date, not identified any
matters that may give rise to an additional liability. The Group also notes
the Government's announcement on 5 June 2025 that it will introduce
legislation to allow retrospective confirmation that any historical pension
changes made met the required standard. Management will continue to monitor
developments in this regard and the implications, if any, for IMPS.
12 FOREIGN CURRENCY TRANSLATION
The main exchange rates used for translation purposes are as follows:
Average rates Period-end rates
30 Jun 2025 30 Jun 2024 31 Dec 2024 30 Jun 2025 30 Jun 2024 31 Dec 2024
Australian dollar 2.06 1.92 1.94 2.09 1.89 2.02
Bolivian bolivar(1) 18.72 8.76 12.43 23.74 8.73 14.24
Chilean peso 1,243.16 1,196.99 1,209.30 1,279.39 1,193.29 1,252.30
Ethiopian birr(2) 169.19 72.81 157.95 186.70 72.81 157.95
Euro 1.19 1.17 1.18 1.17 1.18 1.21
Hong Kong dollar 10.11 9.91 9.99 10.74 9.87 9.75
Singapore dollar 1.72 1.71 1.71 1.74 1.71 1.71
US dollar 1.30 1.27 1.28 1.37 1.26 1.26
1. 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.
13 EVENTS AFTER THE REPORTING PERIOD
In July 2025, Inchcape agreed to acquire Askja and associated businesses,
Iceland's leading automotive distributor.
ALTERNATIVE PERFORMANCE MEASURES
14 ALTERNATIVE PERFORMANCE MEASURES
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.
The Group has included an additional alternative performance measure, the "net
working capital inflow/(outflow)", to allow users to better understand one of
the key drivers of free cash flow.
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, as allocation.
measured on a pre-IFRS 16 basis.
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.
Net working capital inflow/(outflow) The aggregate movement in working capital from continuing operations during A key driver of the Group's free cash flow conversion.
the period as measured by the (increase)/decrease in inventories,
(increase)/decrease in trade and other receivables and the increase/(decrease)
in trade and other payables in the reconciliation of cash generated from
operations, adjusted by the net working capital inflow/(outflow) relating to
discontinued operations.
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
Six months to Six months to
30 Jun 2025
30 Jun 2024
Adjusted profit before tax (from continuing operations) £m £m
Gross Profit 733 814
Add back: Adjusting items charged to gross profit - -
Adjusted Gross Profit from continuing operations 733 814
Less: Segment operating expenses (486) (515)
Adjusted Operating Profit from continuing operations 247 299
Less: Adjusting items in operating expenses (14) (23)
Operating Profit 233 276
Less: Net finance costs and JV profits/losses (47) (81)
Profit Before Tax 186 195
Add: Total adjusting Items 14 31
Adjusted profit before tax from continuing operations 200 226
Tax on adjusted profit (59) (74)
Adjusted profit after tax from continuing operations 141 152
Ratio of adjusted net operating expenses to revenue £m £m
Revenue 4,320 4,725
Adjusted net operating expenses 486 515
Ratio of adjusted net operating expenses to revenue 11.3 % 10.9 %
Adjusted earnings before interest, tax, depreciation and amortisation £m £m
Adjusted Operating Profit from continuing operations 247 299
Add:
Amortisation including non-adjusting impairment charges 4 5
Depreciation of property, plant and equipment including non-adjusting 21 25
impairment charges
Depreciation of right-of-use assets 34 40
Depreciation of leased vehicles, rental machinery and equipment 10 11
Payment of capital element of lease liabilities (36) (43)
Receipt from finance sub-lease receivables 1 1
Lease interest paid (7) (9)
Adjusted earnings before interest, tax, depreciation and amortisation 274 329
APMs: Reconciliation of statement of cash flows measures
As at As at As at As at
30 Jun 2025
30 Jun 2025
30 Jun 2024
30 Jun 2024
Free cash flow (from continuing operations) £m £m £m £m
Net cash generated from total operating activities 112 283
Add back: Payments in respect of adjusting items 9 21
Net cash generated from operating activities, before adjusting items 121 304
Purchase of property, plant and equipment (16) (34)
Purchase of intangible assets - (2)
Proceeds from disposal of property, plant and equipment 8 4
Net capital expenditure (8) (32)
Net payment in relation to leases (35) (42)
Dividends paid to non-controlling interests (6) (9)
Free cash flow 72 221
Add: Free cash outflow from discontinued operations - 5
Free cash flow from continuing operations 72 226
Six months to Six months to
30 Jun 2025
30 Jun 2024
Net working capital inflow/(outflow) (from continuing operations) £m £m
(Increase)/decrease in inventories (279) 330
Increase in trade and other receivables (25) (99)
Increase/(decrease) in trade and other payables 251 (142)
Less: net working capital inflow from discontinued operations - (7)
Net working capital (outflow)/inflow (from continuing operations) (53) 82
APMs: Reconciliation of statement of financial position measures
As at As at
30 Jun 2025
30 Jun 2024
Return on capital employed (from continuing operations) £m £m
Adjusted operating profit 247 299
Adjusted operating profit for the previous 6 month period 285 325
Adjusted operating profit on a 12 month basis 532 624
Net assets 1,114 1,503
Less: Net assets from discontinued operations - (240)
Net assets from continuing operations 1,114 1,263
Add: Net debt 656 891
Add: Net funds/(net debt) from discontinued operations - 6
Capital employed - continuing operations 1,770 2,160
Effect of averaging 195 56
Average capital employed 1,965 2,216
Return on capital employed 27 % 28 %
As at As at
30 Jun 2025
31 Dec 2024
Adjusted net debt and leverage £m £m
Net debt 656 492
Less: Lease liabilities (282) (302)
Adjusted net debt 374 190
Adjusted earnings before interest, tax, depreciation and amortisation 274 634
Adjusted earnings before interest, tax, depreciation and amortisation for the 305 n/a
previous 6 month period
Adjusted earnings before interest, tax, depreciation and amortisation on a 12 579 634
month basis
Leverage (times) 0.6x 0.3x
APMs: Earnings per share measures
Six months to Six months to
30 Jun 2025
30 Jun 2024
Adjusted earnings per share (from continuing operations) £m £m
Adjusted profit after tax 141 152
Less: Non-controlling interests (4) (9)
Adjusted earnings 137 143
Weighted average number of shares (m) 386 412
Diluted effect (m) 7 6
Basic adjusted earnings per share 35.5p 34.7p
Diluted adjusted earnings per share 34.9p 34.2p
INDEPENDENT REVIEW REPORT TO INCHCAPE PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months to 30 June
2025 which comprises the Group's consolidated income statement, consolidated
statement of comprehensive income, consolidated statement of financial
position, consolidated statement of changes in equity, consolidated statement
of cash flows and related notes 1 to 13.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months to 30 June 2025 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the Annual Report and Accounts of the Group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, England
28 July 2025
14 ALTERNATIVE PERFORMANCE MEASURES CONTINUED
The Directors confirm that the condensed consolidated interim financial
statements in the Interim Report have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial Reporting'
and that the Interim Report includes a fair review of the information required
by Disclosure and Transparency Rules 4.2.7R and 4.2.8R, namely:
• an indication of important events that have occurred during the
first six months and their impact on the condensed consolidated interim
financial statements;
• a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
• material related party transactions in the first six months and any
material changes in the related party transactions described in the last
Annual Report.
The Directors and positions held during the period were as published in the
Annual Report and Accounts 2024. A list of current Directors is maintained on
the Inchcape plc website (www.inchcape.com).
On behalf of the Board
Duncan Tait
GROUP CHIEF EXECUTIVE
28 July 2025
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPUBAMUPAGBRRecent news on Inchcape
See all newsREG - Inchcape PLC - Transaction in Own Shares
AnnouncementREG - Inchcape PLC - Total Voting Rights
AnnouncementREG - Inchcape PLC - Notice of GM
AnnouncementREG - Inchcape PLC - Transaction in Own Shares
AnnouncementREG - Inchcape PLC - Director/PDMR Shareholding
Announcement