Preliminary Results - Part 1

Inchcape PLC
5 March 2001

PART 1

INCHCAPE ANNOUNCES PRELIMINARY RESULTS FOR YEAR 2000

Inchcape plc, the international automotive services group, announces its
results for the year to 31 December 2000.

HIGHLIGHTS INCLUDE

1. Continuing operating profit up 3.9% at £83.5m (1999 - £80.4m);

2. Strong performance in key overseas markets, with operating  profits from
Asia up 65.2%; non-UK operations account for 67.2% of continuing turnover;

3. UK Retail operating profits up 4.4% before Rover restructuring costs;
overall UK performance impacted by market turbulence, continued investment in
E-commerce business, and other non-recurring factors;

4. 16 businesses sold or closed, generating £64.4m, as focus on automotive
services in key markets continues.  Strong balance sheet, with cash generation
of £79.9m;

5. The sale of IRB, our Financial Services subsidiary in Brunei, will reduce
net debt further by c.£67.8m.  As a result  the Group would have been
effectively ungeared, on a pro forma basis, at year end;

6. Up to £45.0m to be returned to shareholders in coming months; Board intends
to extend powers to purchase up to 14.99% of Company's capital;

7. Recent acquisition of 49.0% of Eurofleet provides opportunity to enhance
and build business services and logistics capability;

8. Dividend for the year 22.0p up 4.8%;

9. Prospects - Operating performance in the UK will rebound and the Group's
interest charge will reflect our much lower debt position. 

Peter Johnson, Chief Executive of Inchcape plc, commented:

'Inchcape has made considerable progress in the last 18 months.  We have
successfully disposed of many of our non-core businesses and are now focusing
on six core markets, with excellent manufacturer relationships, a strong
balance sheet and an outstanding opportunity to deliver our UK strategy.'

INTRODUCTION

Inchcape's results for 2000 provide considerable encouragement for the
prospects of the Group.  The excellent performance from our operations in Asia
with profits up 65.2% to £65.9m, supported by solid results from our
Continental European operations, reduced the impact of the widely documented
downturn in the UK automotive market.

DISPOSALS

During 2000, we disposed of 16 businesses, generating proceeds of £64.4m. 
These businesses reported an operating profit of £0.1m in the year.  During
2001 we have already announced the disposal of IRB and Mazda France.  

We regularly review our portfolio of businesses and will continue to exit
those where we cannot add value, or where the business is unlikely to become a
scale contributor.  The disposal programme to date has transformed the Group's
financial position.  Further disposals will occur in 2001.  

Since the special dividend of £529.3m paid on 9 July 1999, net debt has fallen
by over £125.0m to £69.1m as a result of successful disposals allied to strong
operational cash flow.  The sale of IRB and Mazda France will further reduce
debt by some £78.0m moving the Group into a net cash position on a pro forma
basis. 

RETURN OF CAPITAL

The Board has powers to purchase up to 10.0% of the Company's capital.  We
intend to extend that authority to 14.99% at the forthcoming AGM.  In the
light of the financial resources now available to us, we expect to return up
to £45.0m (equivalent to approximately 50p per share) to shareholders in
coming months as conditions allow.

At this level, the Group will remain well positioned to capitalise on future
investment opportunities as they arise, especially in the UK, over the next
two years.  These investments will continue the transformation of this Group
and the Board will ensure that they continue to meet its stringent
requirements in relation to return on capital employed.  If available funds
arising either from operational cash flow or disposals are not applied for
investment purposes, the Board will make additional returns of capital to
shareholders.

STRATEGY UPDATE

We supply automotive services and currently have profitable scale operations
with prospects of growth in six core markets.  We also have quality long term
relationships with excellent manufacturers.  In concentrating on these, we
will continue to significantly improve the quality of earnings of Inchcape.

We will develop our core markets - the UK, Greece, Belgium, Australia, Hong
Kong and Singapore by broadening our business base, moving closer to the end
customer and expanding the retail offering.

Our major manufacturer relationships are with Toyota, Ferrari, Subaru and
Jaguar.  We are Toyota's largest independent distributor and Ferrari's largest
independent distributor and retailer.  These relationships, in many different
markets and the strength of our performance, have brought a trust and respect
that protects and enhances the quality of our business over time and opens up
new opportunities for Inchcape.

The special relationship we enjoy with Toyota Motor Corporation (TMC) provided
us with an opportunity, using our base in Greece, to expand into the Balkans
pushing into retail in many of these markets.  We are also in early
conversations with TMC on the possibility of future representation
opportunities in China, leveraged from our Hong Kong business.  

As Ferrari's largest independent importer and retailer we continue to work
with them to increase our business portfolio.  We have recently become the
major retailer for Ferrari in Belgium and are in negotiations to add the
Maserati business.

In Australia we have invested in retail and provide exclusive representation
for VW and Jaguar in Sydney.  We have launched an exciting new initiative with
Subaru to represent them exclusively in Melbourne.

In the UK we had a particularly turbulent time in the last few years driven by
the impending renewal of Block Exemption and the structural change in our
distribution business.  Inchcape predicted several years ago that certain
manufacturers would wish to control their own distribution.  With this in mind
we have successfully exited those distribution businesses which, in part, has
resulted in our much-strengthened balance sheet.

Structural change will continue and presents significant opportunities for
Inchcape both within and outside the retail arena. 

Opportunities in the Business Services sector arise in the provision of
vehicle logistics, used car re-marketing and fleet management.  We are well
placed to take advantage of these opportunities especially with our recent
acquisition of 49.0% of Eurofleet, one of the acknowledged UK industry leaders
in the area of vehicle refurbishment and logistics.  We will be looking to
further enhance our business services and logistics capabilities.  We will
also be seeking to expand our fleet management capability. 

Our retail strategy is to develop scale investments with a number of
specialist manufacturers.  Within the UK market the returns from volume
franchises have been far less attractive and there is no evidence today that
the consolidation into larger Customer Marketing Areas (CMAs) has brought the
predicted improvement in returns.  We intend to await the outcome on ultimate
Block Exemption renewal before making any further investments in volume
franchises.

We are uniquely placed through our international strength, broad business
infrastructure and strong manufacturer relationships to exploit opportunities
as they arise in the UK market. 

FINANCIAL PERFORMANCE

2000 PRELIMINARY RESULTS

SUMMARY RESULTS
                                  2000       1999
(£ million)              
Continuing Turnover             3073.7       2811.0
Continuing Operating Profit       83.5         80.4
Headline Profit Before Tax        74.1         85.3
Exceptionals                      (0.7)       214.0
Profit Before Tax                 73.4        299.3
Headline Earnings Per Share       49.3p        60.0p
Ordinary Dividend Per Share       22.0p        21.0p

Continuing operating profit, after a £7.0m residual value provision in our UK
Leasing business and a £3.0m one-off Central cost, rose by 3.9% to £83.5m. 
Total operating profit was £90.1m compared to £101.0m for 1999 due to the
impact of discontinued businesses.  

Headline profit before tax was £74.1m compared to £85.3m in 1999. Headline
earnings per share fell to 49.3p from 60.0p.  

The £0.7m net exceptional loss arises from businesses and properties sold.

OPERATIONAL REVIEW

CONTINUING BUSINESSES

Continuing operating profit before exceptionals increased by 3.9% to £83.5m. 
Of this increase, £1.2m relates to the exchange benefit of using 2000 average
rates compared to 1999 rates.  Continuing operating profit by market is
analysed below.

UK
OPERATING PROFIT £0.7M 2000, £25.0M 1999

The market uncertainty that arose from the Competition Commission enquiry into
new car pricing particularly impacted the second half of the year, affecting
the majority of our businesses.  

£10.5m of the £24.3m UK shortfall related to our Leasing business (categorised
in Financial Services).  Leasing was impacted by the substantial fall in used
car residual values, down approximately 10.0% during the year.  As a result,
provisions of £7.0m were made to cover future losses anticipated on residual
value buy back guarantees.

£6.5m of the shortfall was due to Autobytel UK our E-commerce business.  Our
investment in Autobytel UK reached its peak in 2000 - its first full year of
operation.  The year-on-year comparison was impacted by the release in 1999 of
a £3.0m provision previously held against the Group's investment in
Autobytel.com.  To date, we have invested £12.3m in Autobytel UK. Brand
recognition remains exceptionally strong with over five million unique
visitors since launch and a 70,000 strong customer database.  We believe
strongly that e-commerce can play a significant part in the automotive
services sector in the long term, and remain committed to fully exploiting
this new channel to market.  Levels of expenditure required to develop the
Autobytel product and brand will reduce significantly going forward.

Profits from our associate, the MCL Group (the Mazda and Kia distributor),
fell by £1.7m, with Mazda volumes down 14.1%.

Seaking, our logistics business, lost £4.0m in the year.  This business is now
in the process of being integrated into Eurofleet.  It will benefit from their
systems and processes and will result in significant cost reductions.
Our UK Retail profits declined by  £0.3m to £8.8m, but this was after a £0.7m
cost associated with the restructuring of our Rover dealerships.  Underlying
Retail profits, therefore, grew year-on-year in spite of significant consumer
uncertainty in the UK market.  The financial services profits (included in
Financial Services results) generated from our UK Retail operations increased
to £1.0m.  We remain confident that with the forecast market improvement our
UK Retail business will produce our targeted returns.

Our Ferrari business continues to perform well, again increasing its profits.
However losses were incurred in the re-launch of the Maserati brand, one of
the world's most exciting high performance marques.

GREECE/BELGIUM 
OPERATING PROFIT £17.7M 2000, £16.7M 1999

Within these markets profits rose by 6.0% to £17.7m.

In Greece profits increased due to the improved performance in our financial
services business.  However, Toyota suffered margin pressure arising from the
weak Euro and volumes remained static partly due to the limited product
availability.  French production of the Yaris in late 2001 will reduce these
supply constraints.  

We are currently investing in a number of markets in the Balkans. By utilising
our Greek distribution infrastructure, we have reduced both initial investment
levels and risk.  In the medium term there is significant growth potential in
these markets.

Profitability in Toyota Belgium increased despite both volume and market share
performance being affected by the lack of competitive diesel products in a
market dominated by diesel derivatives. 

AUSTRALASIA 
OPERATING PROFIT £9.4M 2000, £11.4M 1999

Subaru remains the cornerstone of our Australasian operations and again
performed exceptionally well.  It increased both market share and sales
volumes in a declining market.  Outside of Japan and the USA our Australia
Subaru market share of 3.5% is the highest in the world.  However, with the
Australian dollar falling to its lowest level for 10 years against the Yen,
margins came under pressure.

Profits for Jaguar were static at £1.5m.  As envisaged the Jaguar distribution
business will revert back to the manufacturer during 2001, but our Jaguar
retail operations in Sydney have been granted exclusive rights of
representation.  We also have exclusive VW representation in Sydney.

In addition in 2001, we are investing in Melbourne where, from 2002 onwards,
we will be the exclusive Subaru retailer. Melbourne represents 22.1% of the
Australian market.  Our Peugeot business reduced losses during the year to
less than £1.0m, and profits are expected in 2001.

HONG KONG 
OPERATING PROFIT £40.7M 2000, £24.0M 1999

In Hong Kong we achieved excellent profit growth driven primarily by an
outstanding Toyota performance but with all franchises showing marked
improvements.  Market growth was a key factor and margins also held across the
franchises.  The cost of providing extended warranties was lower than expected
and this will continue to favourably impact profits in 2001.  Strong after
sales performance and a buoyant second half taxi market were also significant
contributors.  The taxi market, where Toyota achieves over 80% share, has been
positively influenced by the change from diesel to Liquid Propane Gas (LPG). 
The Financial Services profits were also higher at £6.7m (1999 - £6.1m).

SINGAPORE/BRUNEI 
OPERATING PROFIT £25.2M 2000, £15.9M 1999

In Singapore the additional release of Certificates of Entitlement (COEs)
resulted in a market growth of 60.0%.  Toyota volumes increased by 48.1% and
profits grew by 48.5% despite a fall in new car margins due to high COEs
prices.  The market in 2001, whilst remaining strong, is likely to be lower
than in 2000.  However, the launch of the new Corolla in late 2000 will
continue to help sustain profitability and volumes in 2001.

In Brunei, Toyota retained market leadership with 23.9% share in a static
market. Profits in IRB rose due to lower bad debt provisions.

OTHER 
CONTINUING OPERATING PROFIT £6.1M 2000, £5.2M 1999

Despite a 17.3% improvement in profits this category includes some businesses
where subsequent disposals are likely.

CENTRAL COSTS 
£(16.3)M 2000, £(17.8)M 1999

Central Costs for 2000 included a one-off charge of £3.0m relating to the
research and development of new products and alternate channels to market.
1999 included £3.5m one-off costs arising from the non-Motors divestment
programme.

We have ensured that costs incurred in managing the Group do add value and we
will keep the organisation as lean as possible.  As our business becomes more
focused we will continue to take out cost.

It is also worth noting that the disposal programme which put our Company in
such a strong financial position has been driven by Head Office staff. 

DISCONTINUED BUSINESSES

Profits of £6.6m related to businesses that were sold, closed or transferred
prior to 5 March 2001.  As the disposal of IRB is not expected to complete
until late March 2001 it is treated as a continuing business. The most
significant contribution came from our VW Distribution business in Australia,
which was transferred back to the manufacturer.  Profits relating to
businesses sold or closed amounted to £3.0m.  The consequential proceeds in
2000 were £64.4m whilst in 2001 debt will be reduced by c. £78.0m following
the sale of IRB and Mazda France.

CURRENT TRADING AND PROSPECTS

We have seen evidence of improved retail trading conditions in the UK in the
first two months of 2001 and expect this to continue.  Our UK results will
benefit significantly from this, from the non-recurrence of such leasing
residual value provisions and from the reduced costs of Autobytel UK.  We will
also achieve financial synergies in Business Services through the combination
of Eurofleet and Seaking. 

Asia will continue to perform well and our business in Australia will grow as
our retail investments begin to show returns.

We will continue to broaden our business base and drive shareholder value by
investing in areas that complement our existing business infrastructures in
our core markets.  We will continue to exit markets where we cannot add value
as an independent distributor or achieve scale returns.

The Board will ensure that in supporting the planned strategic initiatives, we
adopt a shareholder value driven approach balancing short term cash
considerations with long term investment opportunities.

DIVIDEND

The Board recommends that a final ordinary dividend of 14.7p (1999 - 14.0p)
should be paid, giving a total dividend for the year of 22.0p (1999 - 21.0p). 
The dividend is 2.3 times covered by Headline earnings per share.  Subject to
approval at the Annual General Meeting on 15 May 2001, the final dividend will
be paid on 15 June 2001 to shareholders on the register on 25 May 2001.

For further information, please contact:

HELEN CARTMELL, GROUP COMMUNICATIONS MANAGER 
INCHCAPE PLC  
020 7546 8328       

JOHN OLSEN/ANDREW JAQUES/NICK LOCKWOOD 
HOGARTH PARTNERSHIP LIMITED  
020 7347 9477


Consolidated profit and loss account
for the year ended 31 December 2000
______________________________________________________________________________
                             Continuing   Discontinued
                             operations     operations      Total
______________________________________________________________________________
                                   2000           2000       2000        1999
                                     £m             £m         £m          £m
______________________________________________________________________________
Turnover including share
 of joint ventures
 and associates                 3,073.7          643.7    3,717.4     4,450.0
Less:
- share of joint ventures         (47.7)         (13.4)     (61.1)     (164.3)
- share of associates            (196.5)        (373.7)    (570.2)     (823.2)
_____________________________  _________  _____________  __________  _________
Group subsidiaries'
 turnover                       2,829.5          256.6    3,086.1     3,462.5
Cost of sales                  (2,388.8)        (218.5)  (2,607.3)   (2,864.9)
_____________________________  _________  _____________  __________  _________
Gross profit                      440.7           38.1      478.8       597.6

Net Operating expenses           (374.5)         (33.6)    (408.1)     (535.5)
Utilisation of termination
 provisions                         0.6            0.7        1.3         7.0
_____________________________  _________  _____________  __________  _________
Operating profit                   66.8            5.2       72.0        69.1
Share of profits of joint
 ventures                          12.9            0.3       13.2        12.5
Share of profits of
 associates                         3.8            1.1        4.9        19.4
_____________________________  _________  _____________  __________  _________
Total operating profit             83.5            6.6       90.1       101.0
Net (loss) profit on sale of
 properties and investments         0.1           (0.5)      (0.4)        1.8

Net (loss) profit including
 provisions on sale and
 termination of operations            -          (18.5)     (18.5)       91.0
Utilisation of provision for
 net loss on sale of
 operations                           -           18.2       18.2       126.4
Costs of fundamental
 reorganisation                       -              -          -        (5.2)
_____________________________  _________  _____________  __________  _________
Profit on ordinary
 activities before interest        83.6            5.8       89.4       315.0
                               =========  =============
Interest                                                    (16.0)      (15.7)
_____________________________                            __________  _________
Profit on ordinary
 activities before taxation                                  73.4       299.3
Tax on profit on
 ordinary activities                                        (18.2)      (27.1)
_____________________________                            __________  _________
Profit on ordinary
 activities after taxation                                   55.2       272.2
Minority interests                                           (7.6)       (5.4)
_____________________________                            __________  _________
Profit for the financial
 year                                                        47.6       266.8
Dividends                                                   (19.2)     (547.9)
_____________________________                            __________  _________
Retained profit (loss) for
 the financial year                                          28.4      (281.1)
==========================                               ==========  =========
Headline profit before
 tax (£m)                                                    74.1        85.3
Headline earnings per
 share (pence)                                               49.3p       60.0p
FRS3 profit before
 tax (£m)                                                    73.4       299.3
Basic and diluted earnings
 per share (pence)                                           54.2p      302.4p


Statement of total recognised gains and losses
for the year ended 31 December 2000
______________________________________________________________________________
                                                             2000        1999
                                                               £m          £m
______________________________________________________________________________
Profit for the financial year                                47.6       266.8
Effect of foreign exchange rate changes:
- results for the year                                        0.8       (14.3)
- foreign currency net investments                           10.3        (9.9)
Unrealised (deficit) on impairment
 of revalued properties                                      (0.3)          -
_________________________________________________________   ______     _______
Total recognised gains                                       58.4       242.6
_________________________________________________________   ______     _______


Note of historical cost profits and losses
for the year ended 31 December 2000
______________________________________________________________________________
                                                             2000        1999
                                                               £m          £m 
______________________________________________________________________________
Reported profit on ordinary activities before
 taxation                                                    73.4       299.3
Realisation of property revaluation surpluses                 1.5         5.2
Difference between the historical cost and the 
 actual depreciation charge                                   0.6         0.6
________________________________________________            _____        _____
Historical cost profit on ordinary activities
 before taxation                                             75.5       305.1
================================================            =====       ======
Historical cost profit (loss) after taxation,
 minority interests and dividends                            30.5      (275.3)
================================================            =====       ======


Consolidated balance sheet
as at 31 December 2000

______________________________________________________________________________
                                                             2000        1999
                                                               £m          £m
______________________________________________________________________________
Fixed assets:
Intangible assets                                             3.7         4.7
Tangible assets                                             244.5       260.4

Investments:
- joint ventures: share of gross assets                     534.5       564.7
                  share of gross liabilities               (479.2)     (528.0)
                                                          _______     _______
                  share of net assets                        55.3        36.7
- associates                                                 43.5        58.9
- other investments                                          12.9         3.6
__________________________________________________        _______     _______
                                                            359.9       364.3
Current assets:
Stocks                                                      530.1       573.5
Debtors:
- amounts due within one year                               255.4       219.6
- amounts due after more than one year                       68.0        80.3
Investments                                                  10.4        21.3
Cash at bank and in hand                                    166.4       142.5
__________________________________________________        _______     _______
                                                          1,030.3     1,037.2
Creditors - amounts falling due within one year:
Borrowings                                                 (138.6)     (228.3)
Other                                                      (566.5)     (515.9)
__________________________________________________        _______     _______
                                                           (705.1)     (744.2)
__________________________________________________        _______     _______
Net current assets                                          325.2       293.0

Total assets less current liabilities                       685.1       657.3

Creditors - amounts falling due
 after more than one year:
Borrowings                                                  (96.9)      (63.2)
Other                                                       (61.8)      (88.9)
__________________________________________________        _______     _______
                                                           (158.7)     (152.1)

Provisions for liabilities and charges                     (113.9)     (138.9)
__________________________________________________        _______     _______
Net assets                                                  412.5       366.3
==================================================        =======     =======

Capital and reserves:
Called-up share capital                                     132.5       132.5
Share premium account                                       106.9       106.9
Revaluation reserve                                          37.2        37.6
Profit and loss account                                      88.7        43.1
__________________________________________________        _______     _______
Equity shareholders' funds                                  365.3       320.1
Minority interests                                           47.2        46.2
__________________________________________________        _______     _______
                                                            412.5       366.3
==================================================        =======     =======


Consolidated cash flow statement
for the year ended 31 December 2000

Reconciliation of operating profit to operating cash flows
______________________________________________________________________________
                                                             2000        1999
                                                               £m          £m 
______________________________________________________________________________
Operating profit                                             72.0        69.1
Amortisation                                                  0.9         1.0
Depreciation                                                 24.8        32.9
Loss(profit) on sale of tangible fixed assets 
 other than property                                          1.2        (0.2)
Decrease in stocks                                           14.8        57.3
(Increase) Decrease in debtors                              (44.9)       25.7
Increase (Decrease) in creditors                             28.1       (76.1)
Payments in respect of exceptional operating items           (1.3)       (2.7)
Payments in respect of termination of operations             (1.1)      (33.7)
Other items                                                  (4.0)        2.0
__________________________________________________        _______     _______
Net cash inflow from operating activities                    90.5        75.3
==================================================        =======     =======


Consolidated cash flow statement
______________________________________________________________________________
Net cash inflow from operating activities                    90.5        75.3
Dividends from joint ventures                                 5.9         4.5
Dividends from associates                                     3.1        13.3
Returns on investments and servicing of finance             (14.8)      (15.7)
Taxation                                                    (12.4)      (17.6)
Capital expenditure and financial investment                (21.1)      (34.3)
__________________________________________________        _______     _______
                                                             51.2        25.5
Acquisitions and disposals                                   48.2       626.0
Equity dividends paid                                       (18.8)     (570.5)
__________________________________________________        _______     _______
Net cash inflow before use of liquid resources
 and financing                                               80.6        81.0
Net cash (outflow) from the management of
 liquid resources                                           (88.1)      (25.6)
Net cash (outflow) from financing                           (49.1)      (50.7)
__________________________________________________        _______     _______
Net (decrease) increase in cash                             (56.6)        4.7
==================================================        =======     =======


Reconciliation of net cash flow to movement in net funds and debt
______________________________________________________________________________
Net (decrease) increase in cash                             (56.6)        4.7
Net cash outflow from increase
 in debt and lease financing                                 49.1        50.7
Net cash outflow from the management of liquid
 resources                                                   88.1        25.6
__________________________________________________        _______     _______
Change in net funds and debt resulting from
 cash flows                                                  80.6        81.0

Effect of foreign exchange rate changes on net debt          (1.4)       (7.3)
Inception of finance lease contracts                            -        (0.2)
Net loans and finance leases of subsidiaries acquired
 and sold                                                     1.0        25.1
Liquid resources of subsidiaries sold                        (0.3)     (104.2)
__________________________________________________        _______     _______
Movement in net debt                                         79.9        (5.6)
Net (debt) at 1 January                                    (149.0)     (143.4)
__________________________________________________        _______     _______
Net (debt) at 31 December                                   (69.1)     (149.0)
==================================================        =======     =======

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