Broker snap: Macro concerns continue at Inchcape, says Nomura

13th Mar 2012 11:40

Nomura has reiterated its neutral rating and 390p target price on car retailer and distributor Inchcape, saying that while the results were broadly in line with expectations, there are some concerns over the global economic environment.Group sales decreased by 1.0% to £5.8bn for full year 2011 versus 2010. On a like-for-like constant currency basis, the decrease was 1.7%. Profit before tax and exceptional items of £227.7m was 6.4% higher than 2010.Nomura notes that, within the divisions: strong growth was seen in Russia and the emerging markets; north Asia produced good margins; while Australasian sales performed ahead of expectations. However this was offset by higher interest and joint venture payments.Management did sound cautious over the outlook in the EU however, with concerns still surrounding Greece, Belgium and the UK. Thailand flood-related supply issues continue to have an impact also."We continue to see the group well positioned for a macro recovery in the medium term. However, given the strong share price performance year-to-date, and continuing macro uncertainty, we maintain our neutral rating on the shares," the broker said. Nevertheless, shares were trading 5.81% higher at 398.8p just before midday in London.BC