# Inchcape strong FY21 results; focused on significant growth opportunities ahead

- Link: https://www.directorstalkinterviews.com/inchcape-strong-fy21-results-focused-on-significant-growth-opportunities-ahead/4121054516
- Published: 2022-02-24T07:07:25+00:00
- Author: Giles

> **Inchcape plc** (LON:INCH), the leading global automotive distributor, announced
> today its preliminary results for the year to 31 December 2021
> **Duncan Tait, Inchcape CEO, commented**:
> “Inchcape delivered a strong set of FY21 results, with improved performance across
> all regions. The combination of robust consumer demand and excellent operational
> execution, against the backdrop of supply shortages, drove our topline recovery
> and higher margins, enabling profits to rebound to pre-pandemic levels. We are
> pleased to declare a higher full-year dividend, and reflecting the Group’s highly
> cash generative business model we have announced another £100m share buyback programme.
> During the year we launched our new strategy, Accelerate, which is focused on 
> two exciting growth opportunities. Our ambition is to extend our global leadership
> in automotive distribution, and to capture more of a vehicle’s lifecycle value.
> We’ve made great progress with our strategic priorities, adding new markets and
> OEMs through acquisitions and contract-wins, and further developing our digital
> and analytics capabilities. Inchcape has a really exciting future, and is well-
> positioned to deliver sustainable long-term value for all of our stakeholders 
> through organic growth, market consolidation and cash generation.”

### **Financial highlights:**

§ Group revenue of £7.6bn: up 21% on an organic basis and 12% reported; underlying
3% below 2019 levels

§ PBT (pre-exceptionals) of £296m (2020: £128m), driven by strong execution and 
high vehicle gross margins

§ Statutory profit before tax of £195m, impacted by the loss on disposal of part
of our Retail operations in Russia

§ Highly cash generative and strong returns: 2021 free cash flow of £289m (88% cash
conversion) and 30% ROCE

§ Strengthened financial position: finished 2021 with net cash of £379m (Dec-20:
£266m) following c.£80m share buybacks

§ Proposed final dividend of 16.1p (2021 full year: 22.5p, 2020: 6.9p); announced
new £100m share buyback programme

### **Strategic highlights:**

§ Launched new strategy, Accelerate: focussed on two exciting global growth opportunities,
leveraging our distribution core

§ Distribution footprint expanded: signed five new contracts adding an aggregate
of c.£200m annualised revenue

§ First-time distribution relationships with Geely (Chile) and Chrysler (Caribbean)

§ Broadened geographic footprint: Caribbean (Suzuki, Mercedes-Benz), Indonesia (
JLR) and Guatemala (Mercedes-Benz)

§ Accelerated our digital adoption: rolled-out omnichannel capability (DXP), now
live in 27 OEM markets (Dec-20: one)

§ Established bravoauto, a multi-brand, digital-first, used car platform – global
roll-out to begin in 2022

### **Outlook:**

The Group’s strong performance in 2021 was supported by robust consumer demand and
high vehicle gross margins (particularly in Retail), largely due to vehicle supply
shortages. Looking ahead, our 2022 performance to date has seen a continuation of
the trends experienced last year, although there is ongoing uncertainty relating
to vehicle supply and the impact of the pandemic. We expect the Group to continue
to make good progress with its strategic priorities in 2022. The strength of our
business model and financial position means Inchcape is well placed to continue 
to grow profits and generate cash, and we are confident in the medium-term outlook
set out at the Capital Markets Day in November.

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