It’s a nervy time for car retailers, so good half-year numbers from Marshall Motor (MMH) were rewarded with a 7 per cent rise in the share price on results day. The sector and its investors have been worried about a softening in the new car market for some time, but MMH managed to keep like-for-like volumes flat year on year, despite a wider market contraction of 4.8 per cent. According to chief executive Daksh Gupta, that’s down to having “good talent in the business” and a clear focus on premium brands, namely German names such as Mercedes and Volkswagen, as well as Jaguar Land Rover. Include Volvo – which Mr Gupta describes as “increasingly desirable” – and that’s 70 per cent of MMH’s dealership portfolio.
Sales fared even better over at the used and aftersales divisions, although gross margins were 62 basis points lower at 6.8 per cent in the former. This will feed sector bears, worried about how used cars are performing. But bosses say this pain was necessary to drive volume improvements, and keep to the company’s wider, aggressive stock policy. Even with this margin pressure, the division reported a 37 per cent improvement in gross profit to £31.2m.
Analysts at N+1 Singer expect pre-tax profit of £28.1m for the year to December 2017, giving EPS of 27.7p, compared with £25.4m and 26.2p in 2016.
| MARSHALL MOTOR (MMH) | ||||
| ORD PRICE: | 151p | MARKET VALUE: | £117m | |
| TOUCH: | 150-152p | 12-MONTH HIGH: | 181p | LOW: 132p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 204p* | NET DEBT: | 22%** | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 0.83 | 12.1 | 11.6 | 1.80 |
| 2017 | 1.19 | 18.6 | 18.6 | 2.15 |
| % change | +44 | +54 | +60 | +19 |
| Ex-div: | 24 Aug | |||
| Payment: | 22 Sep | |||
| *Includes intangible assets of £122m, or 158p a share **Excludes leasing loans of £65.9m | ||||
