Q1: You released your pre-close statement this morning, pretty impressive! What were the key messages to this?
A1: I think the two big messages I’d say. Firstly, I’m delighted to be able to announce this morning that despite a challenging new car market, we actually expect our 2017 results to be ahead of our previously upgraded forecast for 2017. I think the second thing I’d really highlight from the pre-close this morning is that following our disposal of Marshall Leasing, our balance sheet is in a really outstanding shape. At the interims, you may recall, that we had a net debt position of £101.1 million, this has now been virtually all eliminated and has positioned us very well for the future as we want to continue to grow the business.
Q2: So, what were the key highlights from the statement that underpinned these results?
A2: Well, Marshall Motor Holdings delivered an excellent performance across all revenue streams. I think if we first of all talk about new retail, in the first half of the year we reported a marginal decline of just 0.4% and this compares to a market that was down 4.8% in the first half. In the second half of the year, new retail market was down 9.2% and whilst our volumes declined, actually we maintain our outperformance to the market in the second half so particularly pleased with that.
I think that really demonstrates that our strategy has been correct and that has been to partner with the right brands in the right markets and all underpinned by strong OEM relationships. From a Marshall perspective, we remain very committed to the new car franchise model.
We’re also very pleased with our used car performance. In the first half of the year, we saw our used car unit sales performance up 5.8% and the second half of the year, we continued to perform very well. So, very pleased to be able to balance both a great new car performance and used as well.
Finally, from an aftersales performance, we continue to deliver a robust second half performance, and this is broadly consistent with the first half which was up 2.3% and this remains a critical part of our business as it contributes just over 10% of revenue, however 45% of total gross profit.
Q3: How have you achieved this and how do you see the outlook for Marshall Motor Holdings?
A3: Well the group has got a very strong brand mix, we operate in attractive geographic territories and we’ve got excellent brand partner relationships and outstanding people. Really, this has been put in place over many many years as a result of the group’s strategy so for me, it really indicates the strategy has been right.
In terms of outlook, we are cautious of the result of economic and politic uncertainty out there and we also note the latest SMMT forecasts which is saying they’re anticipating the decline of 5.4% in 2018. However, what I would say is much of this has been a result of the one-off benefit that we saw in Q1 last year as a result of the VED changes.
We are also keeping very focussed and driving the core business and a good example of that is that in November, we announced the closure of 6 of our sub-scale loss-making and underperforming sites. Clearly, what we’ve demonstrated with this announcement as well, as we’ve done previously, is that we do have a long track record of outperforming the market and that’s certainly what we continue to aim to do.