Last year was torrid for the retail and automotive sectors, and 2019 shows no signs of improvement so far. Yet while it’s a thankless environment for an automotive retailer, Marshall Motor (MMH) is making a pretty good fist of it.
Like the rest of the automotive dealers, Marshall’s new car business suffered due to the effects of WLTP emissions standards and challenges in the diesel market. Marshall’s new car sales fell 8.2 per cent on a like-for-like basis over 2018. The Society of Automotive Manufacturers expects new car registrations to fall 2.3 per cent on last year, so we don’t expect much respite here.
Marshall had a better time turning over used cars, with like-for-like sales up 2.3 per cent. Regardless of the difficult trading environment, the group has been on the acquisition trail, adding six Skoda dealerships in March, making it the biggest dealership of the Volkswagen-owned marque in the UK. A strong balance sheet underpinned by a £125m property portfolio and low net debt allows Marshall to attack these acquisition opportunities as and when they arise.
Analysts at Zeus Capital forecast full-year 2019 pre-tax profits and earnings per share of £21.7m and 21.9p, respectively, up from £25.7m and 26.5p last year.
| MARSHALL MOTOR (MMH) | ||||
| ORD PRICE: | 165p | MARKET VALUE: | £ 129m | |
| TOUCH: | 160-170p | 12-MONTH HIGH: | 180p | LOW: 123p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 257p* | NET DEBT: | 3% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1.09 | 12.9 | 283 | nil |
| 2015 | 1.23 | 15.4 | 19.7 | 2.98 |
| 2016 | 1.90 | 22.2 | 23.0 | 5.50 |
| 2017 | 2.23 | 12.6 | 12.3 | 6.40 |
| 2018 | 2.19 | 18.7 | 17.9 | 8.54 |
| % change | -2 | +48 | +46 | +33 |
| Ex-div: | 25 Apr | |||
| Payment: | 24 May | |||
| *Includes intangible assets of £112m, or 144p a share | ||||
