Inchcape bags £2.3bn after selling off UK arm

Shares in Inchcape soared over eight per cent this morning as it bagged £2.3bn in revenue in the first quarter, not long after striking a deal to sell off its UK business to a US buyer.

The £2.3bn figure marked a five per cent rise over the period and Inchcape said growth was led by Europe and Africa, which “outperformed” as its order bank unwound.

Inchcape agreed to sell off its UK retail business for £346m to the US-based dealership, Group Automotive 1.

The deal is the latest in an increasing trend of interest in UK car dealerships from across the pond. Since March last year, both Pendragon and Jardine Motors have been acquired by Lithia Group, which has its headquarters in Medford, Oregon.

Lookers was also plucked from London markets in a £504m take-private deal.

In the past year Pendragon has been acquired by Lithia Group of the US, which had also previously acquired Jardine Motors. Lookers was bought by Global Auto Holdings, also from across the Atlantic. Another of Britain’s largest dealerships, Sytner, is owned by Penske Automotive of the US.

Inchcape said growth would return to higher levels over the medium to long term, with moderated growth expected in 2024.

In the Americas, key markets are stabilising, the firm added, and flagged “strong momentum” in APAC.

Duncan Tait, group chief executive, said: “Our positive start to 2024 reflects the underlying quality of our business and we have confidence in, and we have reiterated, our outlook for the year.

“We recently announced an agreement to divest our UK Retail business. This transaction will complete our strategic transformation into a pureplay distribution business which is capital light, highly cash generative, higher margin and globally diversified.”

He added: “With our global market leadership position, digital and data capabilities to support our OEM partners, our Distribution platform is well positioned for the future, and we remain confident about the medium to long-term outlook for the group.”