Inchcape reiterates full-year guidance after solid Q1

(Sharecast News) - Inchcape reiterated its full-year guidance on Thursday after first-quarter revenue growth came in line with management expectations, supported by distribution contract wins, market share gains and strength in the Americas and Europe and Africa. The FTSE 250 automotive distributor said organic revenue rose 6% in the first quarter, while reported revenue increased 8% to £2.3bn.

Revenue grew 7% on a constant currency basis. Inchcape said growth was achieved against soft comparators and reflected a 9% increase in its own volumes, compared with 6% growth in total industry volumes across its markets.

Chief executive Duncan Tait said the group continued to deliver on its strategy, with revenue benefiting from its diversified market and brand portfolio.

"During the quarter, we saw continued good momentum in the Americas and Europe & Africa, offsetting a weaker APAC performance," he said.

In the Americas, Inchcape said it delivered strong growth, helped by supportive market conditions. Europe and Africa recorded another quarter of market outperformance, supported by a strong performance in Iceland following a bolt-on acquisition completed in the third quarter of 2025.

APAC remained weaker, with the company continuing to implement management actions to address challenges, including an increasingly competitive Australian market and brand supply phasing.

Tait said organic revenue growth was supported by "the scaling of distribution contracts secured in recent years, market share gains, growth in our core brand portfolio and supportive market conditions in certain regions".

Inchcape said the situation in the Middle East had had no direct impact on its markets to date, although there had been some immaterial disruption to logistics in Europe and Africa.

The company said it was monitoring consumer demand trends, which had so far remained unchanged.

The group won two new distribution contracts during the quarter, covering Volvo in Ecuador and Deepal in Barbados, while continuing to benefit from contracts secured in previous years.

Inchcape also said it was making progress with its £175m share buyback programme, with about £27m repurchased as of 29 April.

It added that it had an active pipeline of bolt-on acquisitions.

"We remain disciplined in our capital allocation approach," Tait said.

"We are making progress with our recently announced £175m share buyback programme and we have an active acquisition pipeline."

The company maintained guidance for earnings per share growth of more than 10% in 2026 at constant currency, in line with its medium-term target.

It expects organic volume growth towards the lower end of its 3% to 5% guidance range, operating margins of about 6% and free cash flow conversion of about 100%.

Inchcape said revenue and profit were still expected to be weighted towards the second half, reflecting a rising contribution from the Americas, where seasonality is typically second-half weighted, as well as APAC brand supply phasing and the expected benefits of management actions.

The group said it was continuing to manage the business in an agile way with its original equipment manufacturer partners given the uncertain and fast-evolving macroeconomic environment.

"We remain on track to meet our 2026 guidance of EPS growth of more than 10%, in line with our medium term target," Tait said.

At 0822 BST, shares in Inchcape were up 0.39% at 816.2p.

Reporting by Josh White for Sharecast.com.

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