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Inchcape Increases Share Buyback to £250 Million, Reaffirms Full-Year EPS Growth Target
Summary
The UK automotive distributor expanded its capital return program and maintained its full-year earnings forecast, despite flat first-half profits and margin pressure from its Asia-Pacific operations.
Automotive distributor Inchcape plc announced an expanded £250 million share buyback program on Tuesday, signaling confidence despite reporting flat first-half profits. The company reaffirmed its full-year guidance, expecting adjusted earnings per share (EPS) to grow by more than 10% in 2026.
First-Half Performance
Inchcape reported that revenue for the first six months of the year rose 9% year-over-year to £4.7 billion, according to a company statement. The top-line growth was attributed to new distribution contracts and recent acquisitions, with notable strength in the Americas and Europe & Africa regions.
Despite higher revenues, adjusted operating profit remained flat at £248 million. The adjusted operating margin contracted to 5.3% during the period, which the company said was due to pressures in its Asia-Pacific business, particularly in Australia.
AdOutlook and Strategic Adjustments
Inchcape maintained its full-year forecast, projecting an adjusted operating margin of approximately 6% and a free cash flow conversion rate of over 100%. The company noted that its performance is expected to be weighted toward the second half of the year, aided by seasonal patterns and management initiatives.
To address the underperformance in certain markets, Inchcape confirmed it has initiated cost-reduction measures and is in the process of exiting some contracts. These actions are intended to improve profitability in the affected regions.
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