Marshall Motors has signaled takeovers will recommence as the market consolidates in its latest half-year results.
The franchised dealer group’s half-year results were, unsurprisingly, down on last year with an underlying loss before tax of £8.9 million against a profit of £15.2m in the first six months of 2019. However, the group claimed it has outperformed the market and as seen “encouraging sales performance since 1 June”.
Marshall Motors CEO Daksh Gupta said the group was “well placed to capitalise on value accretive growth opportunities” as Covid-19 forces network rationalisations.
Revenue for the first half of 2020 dropped to £895.3m against £1.18bn last year with last year’s profit-before-tax figure of £14.8m dropping to a loss of £10.7m this year.
Commenting on the results Daksh Gupta said: “Despite the significant challenges presented by Covid-19, the Group has delivered a resilient first half performance and once again outperformed the market. Since full reopening under Covid-19 secure guidelines on the 1st of June, trading has been robust and our important Q3 order take is encouraging.
“The impact of Covid-19 will accelerate the rationalisation and consolidation of the UK franchise dealer network. With the group’s excellent brand partner relationships, strong balance sheet, recently renewed £120m revolving credit facility, depth of management team and highly engaged colleagues, the group believes it is well placed to capitalise on value accretive growth opportunities and is therefore well placed to deliver long-term shareholder value.”
Operational and Financial Performance
- Trading significantly ahead of the market in period prior to COVID-19 closure;
- Like-for-like new vehicle unit sales down 37.7%, a strong outperformance versus market registrations, down 48.5%;
- Like-for-like used unit sales down 31.8%, a pleasing result given the impact of lockdown on franchised retailers;
- Like-for-like aftersales revenue down 28.5%, a strong performance in the current environment;
- Adjusted net cash at 30 June: £27.4m (30 June 2019: adjusted net cash of £5.8m; 31 December 2019: adjusted net debt of £30.6); benefiting primarily from significant working capital inflows and also VAT Payment Deferral Scheme;
- £120m revolving credit facility extended in July until 2023; covenant amendments agreed;
- No interim dividend declared;
- Tenth year of being a ‘Great Place to Work’ and sixth year of being ranked in the UK’s Best Workplaces.