Half-year results at vehicle leasing group Marshall Motor Holdings (MMH) were souped up by strong like-for-like revenue growth across new and used car sales, as well as the high margin after-sales segment. This led to an 11 per cent acceleration in operating profits to £11.9m, while gross margins remained stable at 11.7 per cent. Chief executive Daksh Gupta says that while margins may not always hold up, "revenue and volume growth will continue".
The company has expanded significantly since Mr Gupta joined in 2008, including by securing deals with the four major German brands - Mercedes, Volkswagen, Audi and BMW Mini - in four years. Marshall's core strategy is to grow scale through existing brand partnerships. Mr Gupta cites Honda as an example - when he joined the business it had just one dealership with the Japanese car maker, and now it has seven. Competitively priced finance was also another key factor for the group as it leads to customers entering into leasing agreements, which binds them into "the replacement cycle" of buying a new car unless they pay to exit the contract.
Analysts at Investec expect pre-tax profits of £15.5m for the full year, giving EPS of 15p, compared with £12.9m and 12.4p in 2014.
| MARSHALL MOTOR HOLDINGS (MMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 195p | MARKET VALUE: | £150m | |
| TOUCH: | 190-199p | 12-MONTH HIGH: | 195p | LOW: 149p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 2 | |
| NET ASSET VALUE: | 163p | NET DEBT: | 5% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014* | 545 | 9.5 | 209 | na |
| 2015 | 632 | 10.5 | 19.7 | 0.58 |
| % change | +16 | +11 | -91 | - |
Ex-div:27 Aug Payment:25 Sep *2014 figures are pre-IPO. EPS is pro rata | ||||
