Inchcape (LON:INCH) reported what management described as a strong performance in 2025 despite “tariff-related disruption and economic uncertainty,” highlighting record profit before tax (PBT) in the Americas and Europe and Africa and an improved second half in Asia-Pacific (APAC). Group CEO Duncan Tait and Group CFO Adrian Lewis also laid out the company’s outlook for 2026, including a new share buyback program and expectations for earnings growth.
2025 performance: cash generation and shareholder returns
Inchcape said it returned around GBP 340 million to shareholders through dividends and buybacks in 2025 and delivered 13% growth in both earnings per share (EPS) and dividends per share (DPS). The group generated GBP 315 million in free cash flow, which management said underscored its “cash generative and capital-light model.”
Return on capital employed (ROCE) was 29%. Closing leverage was 0.4x, down from 0.6x at the half-year, and within the company’s “self-mandated headroom” of 1x.
The company declared a final dividend per share of 22.8 pence, taking total dividends for the year to 32.3 pence, up 13% year over year.
Strategy execution: contract wins, portfolio actions, and AI tools
Tait said Inchcape continued to execute its Accelerate+ strategy, focused on scaling and optimizing regions and expanding the OEM partner portfolio and geographic footprint to enhance earnings resilience. The company reiterated its ambition to achieve 10% market share across its markets.
In 2025, Inchcape was awarded 10 new distribution contracts with existing OEM brands. Examples cited included:
- New Holland in Ethiopia and Kenya
- BYD in Lithuania and Latvia
- XPENG in Colombia
- GAC AION in Greece
- smart in Colombia, Uruguay, and Ecuador
- Iveco in Hong Kong
The company also rationalized its brand portfolio, mutually exiting four Komatsu contracts in Ethiopia and three Geely contracts in smaller markets in the Americas. Management said it continued to recycle capital by divesting non-core assets, expand its third-party retail network, and grow value-added services such as OEM-certified parts and finance and insurance products.
On technology, Tait said AI is being used in parts pricing and demand models, inventory planning, and vehicle pricing. He also described uses of generative AI for marketing content, customer engagement in service booking, and functional support such as in legal. Tait said AI is “an opportunity” to improve customer satisfaction, OEM collaboration, and financial delivery.
Regional results: strength in the Americas and Europe/Africa, pressure in APAC
Management characterized 2025 as a “year of two halves,” with stronger second-half performance supported by product launches. Inchcape delivered 3% organic volume growth, outperforming markets that grew 2%.
Americas: Market volumes and organic revenue were both up 8%. Operating margins rose 70 basis points to 7%, which Lewis attributed to resilient gross margins, operating leverage from higher volumes, and cost discipline. The region also recorded GBP 8 million in profit contribution from non-core asset divestments. For 2026, Lewis said the market environment is expected to remain supportive, with typical seasonal weighting to the second half.
APAC: Volumes declined 1% and organic revenue fell 12%, though Lewis said the second half improved versus the first half due to product launches. Australia was described as resilient but increasingly competitive, while Asian markets underperformed amid intensified competition, particularly where battery electric vehicle (BEV) penetration is high. Operating margins contracted 60 basis points to 7.2%, despite a GBP 9 million profit contribution from divestments in the second half. Management highlighted actions including improved product positioning with OEM partners and a cost reduction program focused on the regional headquarters and certain underperforming Asian markets. For 2026, challenges in parts of APAC are expected to continue, and production reconfiguration by some OEMs is expected to disrupt supply in certain markets in the first half.
Europe and Africa: Market volumes were up 3%, and organic revenue grew 6%, supported by distribution contracts won in recent years. Operating margins were 4.6%, down 10 basis points, which Lewis said was in line with historical norms and reflected initial dilution from immature distribution contracts. Lewis said the Iceland acquisition is performing well and highlighted strong performance in Southern Europe and continued growth in Africa through contract expansion.
BYD insourcing and contract renewal expectations
Both executives discussed BYD’s move to insource distribution in medium to large European markets, calling it a “BYD-only dynamic.” Lewis said Inchcape’s BYD contract in Belgium and Luxembourg contributes less than 5% of Europe and Africa revenue and represents less than 2% of group revenue and less than 1% of group adjusted PBT. He said the company does not anticipate the contract will be renewed when it expires in Q3 2027.
Capital allocation: new buyback and bolt-on M&A focus
Inchcape announced a new GBP 175 million share buyback program expected to complete over the next 12 months. Lewis said the company repurchased GBP 400 million in shares since August 2024, reducing shares in issue by around 13%. He added that only about half of the 2025 buyback impact has been recognized in EPS due to averaging, which he said would provide a 4%-5% EPS tailwind in 2026.
Management reiterated its capital allocation approach: dividends at 40% of earnings, leverage below 1x EBITDA, and balancing buybacks with value-accretive acquisitions. Lewis said a large deal is “not currently in our consideration set in the near term,” while Tait said the company has a “healthy pipeline” of bolt-on opportunities, with near-term geographic focus more on Europe and Africa and Latin America, while APAC priorities are operational execution.
For 2026, Inchcape guided to growth at constant currency in line with its medium-term framework, including organic volume growth toward the lower end of its 3%-5% range, operating margins of circa 6%, free cash flow conversion of circa 100%, and EPS growth of more than 10%. Management said performance is expected to be weighted to the second half due to seasonality in the Americas and supply-chain phasing in APAC.
About Inchcape (LON:INCH)
Inchcape is the leading global automotive distributor, with operations across six continents. By combining our in-market expertise with our unique technology and advanced data analytics, we create innovative customer experiences that deliver outstanding performance for our partners – building stronger automotive brands and creating sustainable growth. Our distribution platform connects the products of mobility company partners with customers, and our responsibilities span product planning and pricing, import and logistics, brand and marketing to operating digital sales, managing physical sales and aftermarket service channels.
