Technically speaking, these are record half-year results for car retailer Marshall Motor (MMH). But chief executive Daksh Gupta is keen not to overstate the case. The new car market remains challenging but, on an underlying basis and accounting for the recent disposal of the group’s leasing division, pre-tax profits grew by 1.2 per cent to £16.4m. New car sales fell by 5.9 per cent on a like-for-like basis, while used car sales were down 0.3 per cent.
Most of the work, says Mr Gupta, was done in the margins. New car gross margins contracted by 40 basis points, largely due to lost volumes, but gross margins for used vehicles actually grew by 37 basis points to 7.2 per cent. This was enough to deliver a 9.2 per cent uplift in gross profits, while aftersales profits also rose 1.7 per cent to £58.3m. Together, along with a small contribution from acquisitions and stable operating expenses, this was enough to offset new car declines and leave half-year group profits up year on year.
Analysts at Zeus expect pre-tax profits of £23.5m for 2018, giving EPS of 23.1p, growing to £24.1m and 23.7p in 2019.
| MARSHALL MOTOR HOLDINGS (MMH) | ||||
| ORD PRICE: | 156p | MARKET VALUE: | £122m | |
| TOUCH: | 154-158p | 12-MONTH HIGH: | 180p | LOW: 142p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 2 | |
| NET ASSET VALUE: | 258p* | NET CASH: | £0.9m | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 1.17 | 16.2 | 16.2 | 2.15 |
| 2018 | 1.16 | 17.2 | 17.5 | 2.15 |
| % change | -0.4 | +6 | +8 | - |
| Ex-div: | 23 Aug | |||
| Payment: | 21 Sep | |||
| *Includes intangible assets of £122m, or 156p a share | ||||
| **Adjusted for discontinued leasing operations | ||||
