What with the economic downturn, the high cost of petrol and increasing pressure to cut emissions, is it any time to be in car sales? In some parts of the world, it is. Although the mature European markets are slamming on the brakes, new vehicles are accelerating in growing markets such as China and Russia.

Unlike traditional car dealers, which have focused on their domestic market, Inchcape has a strong global spread. It operates in 26 markets and considers its core markets (apart from the UK) as Australia, Belgium, China, Greece, Hong Kong, Russia and Singapore. It is aggressively expanding dealerships in the emerging markets. This year it has spent more than £125 million on dealerships in Moscow and St Petersburg and is seeking out more opportunities in China.

But all this was not enough yesterday to prevent it from giving the warning that there would be no profits growth this year, a move that triggered a sharp fall in its shares.

Inchcape may be better placed geographically than Pendragon, its more British-focused rival which cut 500 jobs this month and gave warning that the market was difficult to predict. But the prospects for a large part of Inchcape’s markets are not glowing and are unlikely to improve swiftly. Despite the company’s considerable global presence, Britain and Western Europe still form a very large part of its business.

The group is also taking measures to reduce its dependence on the volume car sector and shift emphasis to more premium brands. Yesterday it confirmed its commitment to retaining Jaguar and Land Rover dealerships in the UK after the sale of the prestige marques to Tata, in India, but it has sold five Vauxhall retail centres.

The premium segment of the car market offers the best returns and is generally the most resilient to economic downturns. However, there have been some recent slides in luxury car sales, suggesting that the segment isn’t as immune to sharp economic squeezes as the industry may hope.

Inchcape is best known for its dealerships, but its distribution operations – taking cars from the factories to the showrooms – form the biggest part of its profits. In the first half of the year, trading profits in distribution grew 4.2 per cent and the UK division benefited from new business.

Of course, distribution will soften, too, as the number of vehicles being pumped out of the car factories falls in line with demand.

Inchcape cannot get away from the gloom that is dogging a large part of the car market and as such its warning that profits this year would be flat should have come as no surprise. Even so, the company is a better balanced business than many of its competitors and therefore warrants a “hold” recommendation.

UBM

For more than 20 years, tens of thousands of people have travelled to the Hong Kong Jewellery and Watch Fair to cast their eyes on fine finished jewellery, polished diamonds and gemstones. Events such as this, which attracts more than 2,500 exhibitors from 48 countries, are popular in places such as China, India, Mexico, the Middle East and South America.

United Business Media (UBM), the exhibitions and events business and owner of PR Newswire, recognising Britain’s limited scope, was quick to tap into this growth market. The group recognised the appetite for events showcasing industries such as jewellery, leather, fashion, maritime, cruises, beauty, pharmaceuticals and furniture and moved to sate it – with encouraging results. Its big events scheduled for the second half of 2008 show revenues 10 per cent ahead of last year and bookings for key shows next year are also ahead. This has driven first-half profit before tax to £91.5 million, up from analysts’ expectations of £84.5 million.

UBM is well-positioned to grow further through acquisition, with net debt below one times earnings. It also benefits from the fact that Informa, its rival, could be sold soon and that Reed Elsevier is hoping to sell off Reed Business Information, its trade magazines unit. UBM has committed £150 million to £200 million a year to its war chest and would stretch for the right company, or assets.

There is, however, some concern. While revenues have grown by 7 per cent, profits were hurt for a second year running by the disruption of restructuring bureaux in the United States. Profits here declined by £3.4 million to £20 million. There is also a lot more exposure to the troubled advertising market than at rivals such as Informa. As much as 25 per cent of revenues still come from print, although this is down from 56 per cent in 2004.

Overall, wide geographical spread and strong presence in the growth areas of events and exhibitions make UBM relatively resilient. Hold.

St James’s Place

Investors in St James’s Place clobbered the specialist wealth manager unfairly yesterday, sending its shares to near-four-year lows amid worries about its exposure to turbulent equities – this despite resilient first-half operating profits and its best second quarter for new business sales. St James’s, whose higher-net-worth customers are probably less vulnerable to an economic downturn, remains committed to its model of using its own, self-employed advisers. It is still promising to add new business by between 15 and 20 per cent a year over the longer term. This is impressive, but the company does suffer from a perception problem. Mike Wilson, the chairman, highlighted a slew of “all-weather” fund launches yesterday, including cautious managed and bond funds that diversify St James’s away from equities. Yet the shares still trade at a 20 per cent discount to net asset value. Buy on the drop.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive