(Alliance News) - Inchcape PLC on Tuesday launched a new GBP250 million share buyback programme as it set expectations for higher earnings growth in 2025.
Inchcape is a London-based company provides distribution services to original equipment manufacturers in the automotive sector.
Reported pretax profit from continuing operations increased 9.5% in 2024 to GBP414 million from GBP378 million in the previous year.
Revenue dropped 1.3% to GBP9.26 billion from GBP9.38 billion in 2023. Cost of sales fell 0.8% to GBP7.66 billion from GBP7.72 billion.
The company said revenue increased 4% in constant currency, offset by 5% of translational currency headwinds.
Basic earnings per share increased 16% to 66.4 pence from 57.1p in the prior year.
Inchcape said it will buyback GBP250 million of shares. The programme starts on Monday and is expected to conclude within the next 12 months.
The firm completed its most recent share buyback of GBP150 million in the first quarter of 2025.
Inchcape cut its final dividend to 17.20 pence, down 29% from 24.30 pence in the previous year. The full-year dividend per share was down 16% to 28.50 pence from 33.90 pence in 2023.
Chief Executive Officer Duncan Tait said: "Inchcape delivered continued strategic, operational and financial progress in FY 2024, with revenue and profit growth in-line with our expectations at the start of the year.
"This resilient performance reflects our diversified and scaled global market leadership position, our long-standing and valuable OEM relationships, our high performance culture and our differentiated technology capabilities. In FY 2024, we completed our strategic transformation, supported by a record year of Distribution contract wins."
Looking ahead, it said it expects "another year of growth" in 2025.
Inchcape said higher EPS growth would be driven by profit growth and the new share buyback programme.
It said product cycles and the ramp up of new contracts would skew growth into the second half of 2025.
The company also set new medium term targets to 2030 towards more than 10% EPS compound annual growth rate.
It said key financial drivers would be organic volume CAGR of 3% to 5% and "resilient" operating margins of around 6%. The adjusted operating margin in 2024 fell to 6.3% from 6.6% in the previous year.
CEO Tait said: "Looking ahead, we expect to continue growing the business and, by the end of FY 2030, we anticipate generating GBP2.5 billion in free cash flow. We will deploy this free cash flow to drive shareholder returns through both on-going share buybacks and value-accretive acquisitions...In FY 2025, we are guiding to another year of revenue and profit growth, with higher EPS growth consistent with our medium-term targets."
Inchcape shares were down 0.4% to 678.00 pence in London on Tuesday morning.
By Michael Hennessey, Alliance News reporter
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