British automotive distributor Inchcape Plc (LSE:INCH) reported full-year 2025 pretax profit in line with market forecasts and announced a new £175 million share buyback programme, marking its second repurchase initiative in less than a year.
Pretax profit for the year to December 2025 was £443 million, matching company-compiled consensus estimates. Earnings per share rose 13% on a constant currency basis to 80.8 pence, 2% ahead of the 79.1 pence consensus figure. The board increased the full-year dividend by 13% to 32.3 pence.
Revenue declined 2% year-on-year to £9.1 billion. On a constant currency basis, sales were flat, while organic revenue edged 1% higher, broadly in line with consensus expectations of £9.08 billion. Headline earnings before interest and tax fell 1% to £563 million, with the EBIT margin easing slightly to 6.2% from 6.3% in 2024.
Looking ahead, Inchcape expects revenue growth of around 3% in 2026 and an EBIT margin of 6%, consistent with analyst projections for pretax profit of £471 million. Management indicated that performance will likely be weighted toward the second half, reflecting seasonal dynamics in the expanded Americas division and first-half production disruption in Asia-Pacific.
The new £175 million buyback follows completion of a £250 million programme, taking total shareholder returns to £400 million since August 2024. Over that period, the company has repurchased approximately 13% of its outstanding shares.
At current trading levels of 870 pence, the shares trade on roughly 10 times 2026 estimated earnings and 5.3 times EV/EBITDA, offering a free cash flow yield of 14% and a dividend yield of around 4%, according to Jefferies, which maintains a “buy” rating and a 1,050 pence price target. The broker noted that Inchcape’s medium-term targets through 2030 — including 3–5% organic growth, a 6% margin, 25–30% return on capital employed, £2.5 billion in cumulative free cash flow and 10% compound EPS growth — may not yet be fully reflected in the valuation.
Regionally, Asia-Pacific revenue declined 12% on both a reported and organic basis. Europe and Africa recorded growth of 7% reported and 6% organic, while the Americas rose 5% reported and 8% organic. Fourth-quarter organic growth was 2%, with 10 new contracts secured and three exited during the period.
Net debt at year-end stood at £264 million, with leverage at 0.4 times. Working capital contributed a £31 million inflow. Inchcape added that cost efficiencies in Asia-Pacific are expected to offset approximately £17 million of one-off disposal gains recorded in 2025. The company is scheduled to release a first-quarter trading update on 30 April.
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