13th Aug 2019 09:48
(Alliance News) - Vehicle retailer Marshall Motor Holdings PLC hiked its interim dividend Tuesday despite profit struggling in a "challenging" market.
For the six months ended June, pretax profit fell 8.6% to GBP14.8 million from GBP16.2 million the year prior. This was despite revenue rising 1.7% to GBP1.18 billion from GBP1.16 billion the year before.
Profit performance was hurt by one-off costs of GBP400,000 being booked in the current period, compared to GBP224,000 in exceptional gains reported the year prior.
Underlying pretax profit - excluding one-off costs - narrowed 5.0% to GBP15.2 million from GBP16.0 million the year before.
"Despite challenging market conditions, the group has delivered a strong first half unit sales performance, ahead of both the new and used car markets and underlying profit before tax in line with the board's expectations," Marshall Chief Executive Officer Daksh Gupta said.
Like-for-like new unit sales for retail customers fell 0.4%, for fleet customers down 1.1%. This is compared to 3.2% and 3.6% declines, respectively, for the market as a whole.
Used unit sales, however, grew 7.2% and aftersales revenue was 1.8% higher.
Marshall proposed a 2.85 pence per share interim dividend, up 33% from 2.15p the year prior. The significant dividend hike was largely due to a new dividend policy, which will see the firm target a higher payout ratio.
"Given continued weak consumer confidence as a result of ongoing political uncertainty over Brexit, ongoing cost headwinds for the retail sector and further potential new vehicle supply constraints in the lead up to the implementation of further emissions-related regulations on 1 September 2019, the board believes it is right to remain cautious regarding the outlook for the remainder of the year," Gupta added. "Nevertheless, the board's current outlook for the full year remains unchanged."
Shares in Marshall were 0.7% higher at 140.00 pence in London on Tuesday.
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