- Strong 2025 Financials: Revenues reached GBP 9.1 billion with organic growth of 1%, resilient operating margins of 6.2%, and adjusted PBT of GBP 443 million (+3%), alongside GBP 315 million free cash flow.
- Shareholder Returns: Returned GBP 340 million to shareholders via dividends and buybacks, with EPS and DPS growing 13%, and a new GBP 175 million share buyback program announced for 2026.
- Regional Performance: Americas achieved 8% organic revenue growth (+8% market volumes), while APAC saw -12% organic revenue (-1% market volumes), contrasting with 6% growth in Europe and Africa.
- Strategic Execution: Won 10 new OEM contracts, executed a new market acquisition, and exited the Geely distribution agreement, while expanding partnerships with XPENG and Great Wall.
- 2026 Outlook: Targets >10% EPS growth, 6% operating margins, and 100% free cash flow conversion, with GBP 2.5 billion in free cash flow aimed by 2030 and over 10% EPS CAGR through 2030.
Regional Performance and Contract Wins
Regional performances were mixed, with the Americas delivering strong growth, market volumes up 8%, and organic revenue growth of 8%. In contrast, APAC faced challenges, with market volumes down 1% and organic revenue decline of 12%. Europe and Africa outperformed the market, with organic revenue growth of 6%. The company continues to execute against its Accelerate+ strategy, winning more distribution contracts, including 10 new contracts with existing OEM brands.
Outlook and Guidance
For 2026, Inchcape expects a supportive market environment in the Americas, stable performance in Australia, and challenges in Asian markets. The company anticipates resilient operating margins of circa 6% this year, supported by further penetration in aftersales and finance insurance, enhanced collaboration with OEM partners, and cost reduction actions. Analysts estimate next year's revenue growth at 3.1%.
Valuation and Returns
With a P/E Ratio of 7.28 and an ROE of 35.43%, Inchcape's valuation appears reasonable. The company's Dividend Yield stands at 3.38%, and its Free Cash Flow Yield is 12.61%. The Net Debt / EBITDA ratio is 3.67, indicating a manageable debt level. The company's capital-light business model and disciplined approach to capital allocation are expected to drive greater than 10% EPS CAGR to the end of 2030.
Strategic Progress and M&A
Inchcape has transformed its investment proposition over the last 6 years, becoming a pure-play automotive distribution business. The company has generated GBP 2.3 billion in total free cash flow and returned GBP 1.3 billion to shareholders through dividends and buybacks. Inchcape is focused on value-accretive M&A opportunities, primarily in Europe, Africa, and the Americas.
Contract Exits and Wins
The company has exited certain relationships, such as the Geely distribution agreement, and has announced new agreements with XPENG and other Chinese OEMs. Inchcape expects to optimize its portfolio, focusing on shareholder returns, particularly for OEMs that don't meet their strategic analysis top-end criteria. The company will provide regular updates on OEM contract signings and portfolio management.