Inchcape announces £100m buyback

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Multinational car dealer Inchcape said yesterday it would return surplus cash to shareholders by buying back £100m of its stock over the next year after reporting strong first-half results.

The firm, which sells and distributes cars for manufacturers such as Toyota, Mercedes-Benz and BMW in 26 countries, said revenue rose 6.6 per cent to £3.3bn in the six months to June 30, boosted by the acquisition of Australian automotive group Trivett and strong sales in Asia and emerging markets.

While it wants to be able to continue to invest in both organic growth and further acquisitions, London-based Inchcape said it wanted to avoid holding excess cash.

“The board concluded that there is scope to return surplus cash to shareholders,” it said. Panmure Gordon analyst Michael Allen described the buyback as “a positive surprise” and said it could enhance earnings per share by 3-4 per cent.

The company reported record first-half profit before tax of £147m, above a consensus forecast and up 11 per cent from last year. It also said it would pay an interim dividend of 5.7p, up 43 per cent year on year.