Inchcape PLC: FY 2024 Earnings Call Highlights Strong Financial Performance and Growth Prospects

Inchcape PLC (FRA:IJCA), the leading global automotive distributor, recently announced its preliminary results for the twelve months to 31 December 2024, marking another year of progress and setting the stage for future growth. The company's strategic approach, Accelerate+, has driven its financial performance and growth prospects, as highlighted during the earnings call.



Inchcape delivered continued strategic, operational, and financial progress in FY 2024, reflecting its diversified and scaled global market leadership position, long-standing and valuable OEM relationships, and differentiated technology capabilities. The company's revenue grew by 4% in constant currency, while adjusted profit before tax (PBT) increased by 5% in constant currency. Inchcape's adjusted basic earnings per share (EPS) stood at 71.3p, down 7% due to the impact of translational foreign exchange (FX) but offset by underlying growth and share buyback accretion of 1p. The company's reported basic EPS increased by 16% to 66.4p.

Inchcape's strategic approach, Accelerate+, has been a significant driver of its financial performance and growth prospects. The company launched this evolved strategic approach during the year, focusing on growth drivers of scale and optimize. The scale strategy involved winning 22 distribution contracts, while the optimize strategy entailed exiting 4 contracts and disposing of non-core retail assets in the UK and Americas, generating net cash proceeds of £391m. This strategy has led to an acquisition contribution of 2% to the company's revenue growth and improved its financial position.



Inchcape's geographic diversification and expansion have also played a crucial role in its financial performance and growth prospects. The company experienced growth from acquisitions and resilient margins in the APAC region, as well as improved performance in the Americas region during H2 2024. This diversification helps Inchcape mitigate risks associated with relying on a single market and provides opportunities for continued growth in the medium term.

Inchcape's capital allocation policy, including dividends and share buybacks, supports its long-term growth strategy and shareholder value creation. The company maintained its commitment to paying a progressive dividend, reflecting its confidence in the Group's long-term prospects. In 2024, the full year dividend per share was 28.5p, a 16% increase from the previous year. Additionally, Inchcape announced a new £250m share buyback program, reflecting its cash generative business model and strong balance sheet. This further supports shareholder value creation by increasing EPS and potentially reducing the cost of capital.

In conclusion, Inchcape PLC's FY 2024 earnings call highlights the company's strong financial performance and growth prospects, driven by its strategic approach, Accelerate+, geographic diversification, and capital allocation policy. With a target of EPS compound annual growth in excess of 10% and a new £250m share buyback program, Inchcape is well-positioned to continue growing the business and driving shareholder returns in the medium term.