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Highlights:
- Inchcape’s Q3 revenue grew 2% at constant currency, but organic revenue fell by 1%.
- Foreign exchange headwinds, including the devaluation of the Ethiopian Birr, will impact full-year reported results.
- The company remains confident about its medium-term outlook after securing nine new contracts in 2023.
Inchcape PLC (LSE:INCH) shares dropped 5% to 724p after the automotive distributor reported largely flat revenues in its latest quarterly update. The company reported group revenues of £2.2 billion, a modest 2% increase at constant currency, while organic revenue declined by 1%. Foreign exchange headwinds, including the devaluation of the Ethiopian Birr, are expected to weigh on the company’s reported full-year results.
Despite these challenges, Inchcape reiterated its full-year outlook, with growth anticipated to be "moderated" at constant currency. The company highlighted that ongoing cost management measures would help support its performance, though reported results will continue to be impacted by currency fluctuations.
Chief executive Duncan Tait expressed confidence in the company’s medium-term prospects, emphasizing Inchcape’s transition to a pureplay automotive distributor following the sale of its UK retail business. Tait also pointed to the success in winning nine new contracts this year as evidence of the company’s ability to drive growth in the global automotive distribution sector.
“Our success in winning nine contracts so far this year demonstrates our ability to drive growth as a pureplay automotive distributor,” Tait said. “We are therefore reiterating our outlook for the year and remain confident about the medium-term outlook for the group.”
While the company’s cost discipline and strategic repositioning may support long-term growth, short-term challenges related to foreign exchange volatility are likely to remain a drag on its financial performance.
