Marshall Motor Holdings plc (LON:MMH), one of the UK’s leading automotive retail groups, has issued the following update on recent trading and announced that it is now anticipating an underlying profit before tax for the year ending 31 December 2020 of not less than £19m (previously £15m).
On 13 October 2020, the Group announced that as a result of a particularly strong trading performance in the important September plate-change month, it was targeting an underlying profit before tax performance for the Year of £15m. It also noted that this guidance had been given in an environment where there were significant ongoing economic and social uncertainties and so the risks to the Board’s guidance were much higher than in a normal year.
The Group continued to trade strongly for the remainder of October, benefitting from previously reported sector tailwinds. New retail unit sales were up on a like-for-like basis and significantly outperformed SMMT*-reported new retail market registrations, with like-for-like used car unit volumes also performing strongly.
Whilst trading was negatively impacted by the closure of its showrooms throughout November, the Group was able to continue to operate all of its aftersales businesses, take orders online and by telephone and deliver new and used vehicles through ‘click and collect’ services. The Group’s strong outperformance of the wider new car market continued.
Marshall Motor Holdings’ outperformance of the new retail car market for October and November combined was 9.8% on a like-for-like unit sales basis. During the same period, like-for-like used vehicle unit sales were down 12.7% with like-for-like aftersales revenues down just 3.8% compared to the same period in 2019.
Since the reopening of its showrooms on 2 December, the Group has continued to trade well and as result, the Group is now anticipating underlying profit before tax for the Year of not less than £19m.
The Group’s adjusted net cash position (excluding IFRS16) at 30 November was £29.8m.
The Group remains grateful for the various support measures provided by the Government which have enabled the Group to protect the overwhelming majority of jobs within the Group which might otherwise have been at risk. During this unprecedented period, the Group continued to provide vital aftersales services to support emergency services, commercial vehicle operators and key workers; these services were loss-making during the first national lockdown. In addition, the Group enhanced furloughed colleagues’ pay, implemented voluntary reductions in pay and fees by the Board, operational directors and other senior managers and as previously announced, voluntarily repaid all amounts from which it benefitted under the Government’s VAT Payment Deferral Scheme (£10.9m) 18 months early. It is the Group’s current intention not to utilise the Coronavirus Jobs Retention Scheme in 2021.
There continues to remain significant social and economic uncertainties as a result of both COVID-19 and the potential impact of the UK’s departure from the European Union on 31 December 2020. Whilst the Board at Marshall Motor Holdings is pleased with the Group’s response to the significant challenges presented by COVID-19 in 2020, demonstrating the strength and resilience of the Group’s business, it has also benefited from a number of well-documented sector tailwinds in 2020 and therefore remains cautious over the trading environment for 2021.
*Society of Motor Manufacturers and Traders