Inchcape (INCH) Q4 2024 earnings summary

Executive summary

• Achieved 4% organic revenue growth and 5% profit before tax growth in 2024, with record 22 new distribution contract wins and the launch of the Accelerate+ strategy.

• Sold U.K. retail and other non-core assets, focusing on a capital-light, cash-generative distribution model and raising £391m net cash from disposals.

• Announced a new £250m share buyback and updated capital allocation policy, including dividends at 40% of EPS and ongoing buybacks.

• Set new medium-term targets: over 10% compound annual EPS growth and £2.5bn free cash flow by 2030.

• Maintained a strong balance sheet and completed a strategic transformation focused on distribution.

Financial highlights

• 2024 revenue: £9.3bn; organic revenue growth 4% at constant currency; operating margin: 6.3%; adjusted PBT: £444m.

• Free cash flow: £462m, with a 151% conversion rate to adjusted profit after tax.

• Net debt reduced to £190m; leverage at 0.3x EBITDA, down from 0.8x in 2023.

• Adjusted basic EPS: 71.3p, down 7% due to FX; total dividend per share: 28.5p.

• Adjusted operating profit: £584m; effective tax rate increased to 31.3% due to Pillar Two regulations.

Outlook and guidance

• 2025 expected to be another growth year, with EPS growth driven by profit and share buybacks; growth skewed to H2 due to product cycles and contract ramp-up.

• Medium-term targets: organic volume growth of 3%-5%, operating margins around 6%, and 100% profit-to-cash conversion.

• Aim to deliver over 10% compound annual EPS growth and £2.5bn free cash flow by 2030.