Marshall Motor Defies UK Car Market As Chairman Announces Departure

14th Mar 2018 10:33

LONDON (Alliance News) - Automotive retailer Marshall Motor Holdings PLC on Wednesday reported strong profit growth in 2017 from continued operations as Chairman Peter Johnson announced his impending retirement.

Johnson, who guided the company through its initial public offering in April 2015, will leave in the summer. Marshall Motor said it has begun the process to find a successor.

On a statutory basis, pretax profit more than doubled to GBP53.1 million from GBP22.1 million, on the back of revenue growth to GBP2.27 billion from GBP1.90 billion in 2016. Like-for-like revenue growth was 3.5% year-on-year, with like-for-like new car revenue growth of 1.0%, used 7.0%, and aftersales 2.3%.

On an underlying basis, total pretax profit rose 14% to GBP29.1 million. From continued operations, however, it was up 24% to GBP25.4 million.

Marshall Motor sold its Marshall Leasing Ltd business during the year for GBP42.5 million gross, allowing the company to focus solely on its retail operations, as well as "effectively" eliminating its debt.

The company is paying a final dividend of 4.25 pence per share for 2017, which makes the year's total 6.40p, up 16% from 2016's total of 5.50p.

Marshall Motor's new car retail unit sales for 2017 rose 12%, and fell 2.6% like-for-like, although this compares to a UK new retail market drop of 6.8%.

Used car sales increased by 17%, and managed growth of 5.2% despite the UK used car market falling 1.1%. Aftersales revenue rose 20% year-on-year, a "strong" performance, and Marshall Motor said it has delivered further margin improvements in the segment.

Looking forward, Marshall Motor said it remains cautious about the UK car market in 2018 as it normalises during the year. Trading so far this year has been in line, and its outlook for 2018 remains unchanged.

Chief Executive Daksh Gupta commented: "Despite the more challenging market backdrop, the board is pleased to announce another record financial performance which was ahead of our previously upgraded expectations. During 2017 we took a number steps, including the strategic disposal of Marshall Leasing, to prepare the group for the future.

"We are now focused exclusively on our motor retail business and with a significantly strengthened balance sheet remain ideally positioned to exploit future opportunities."

Shares were down 4.7% on Wednesday at a price of 174.90p each.

---

Related Shares:

MMH.L