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Marshall Motor Holdings resilient H1, encouraging reopening, confident of long-term prospects

Marshall Motor Holdings plc (LON:MMH), one of the UK’s leading automotive retail groups, has announced its unaudited interim results for the six months ended 30 June 2020.

Financial Summary

 H1 2020H1 2019
Revenue (£m)895.31,183.3
Gross profit (£m)95.2135.0
Underlying operating expenses (£m)(98.8)(114.9)
Underlying operating loss / profit (£m)(3.6)20.2
Net finance costs (£m)(5.3)(5.0)
Underlying loss / profit before tax  (£m)(8.9)15.2
Non-underlying items (£m)(1.8)(0.4)
Reported loss / profit before tax (£m)(10.7)14.8
   
Net assets (£m)190.5200.7
Basic Underlying EPS (p)(11.2)15.0
Adjusted net cash (£m)27.45.8
Reported net debt (£m)(77.5)(82.2)

Responding to COVID-19

Closure of all businesses from 23 March to 1 June other than 62 strategic aftersales operations which remained open to support emergency services, commercial vehicle operators and key workers;
Maintained retail presence online and by telephone to support customers;
Continued disciplined cost mitigation and cash preservation actions taken;
Coronavirus Job Retention Scheme (CJRS) utilised to protect employment of furloughed colleagues on Company-enhanced terms; 88% of colleagues now returned to work;
Detailed reactivation plan implemented to reopen businesses under revised, COVID-19 secure operating procedures;
Encouraging sales performance since 1 June.

Operational and Financial Performance

Trading significantly ahead of the market in period prior to COVID-19 closure;
Like-for-like new vehicle unit sales down 37.7%, a strong outperformance versus market registrations, down 48.5%;
Like-for-like used unit sales down 31.8%, a pleasing result given the impact of lockdown on franchised retailers;
Like-for-like aftersales revenue down 28.5%, a strong performance in the current environment;
Adjusted net cash at 30 June: £27.4m (30 June 2019: adjusted net cash of £5.8m; 31 December 2019: adjusted net debt of £30.6); benefiting primarily from significant working capital inflows and also VAT Payment Deferral Scheme;
£120m revolving credit facility extended in July until 2023; covenant amendments agreed;
No interim dividend declared;
Tenth year of being a ‘Great Place to Work’ and sixth year of being ranked in the UK’s Best Workplaces.

Daksh Gupta, Marshall Motor Holdings plc Chief Executive Officer, said:

“Despite the significant challenges presented by COVID-19, the Group has delivered a resilient first half performance and once again outperformed the market.  Since full reopening under COVID-19 secure guidelines on the 1st of June, trading has been robust and our important Q3 order take is encouraging.

This has been achieved as a result of our highly engaged and professional colleagues who have gone above and beyond during this difficult period and I am incredibly proud of their commitment and dedication.  On behalf of the Board I would like to take this opportunity to sincerely thank them for their passion, hard work and support.  I would also like to take the opportunity to thank our brand and business partners who have been exceptionally supportive throughout.

The impact of COVID-19 will accelerate the rationalisation and consolidation of the UK franchise dealer network.  With the Group’s excellent brand partner relationships, strong balance sheet, recently renewed £120m revolving credit facility, depth of management team and highly engaged colleagues, the Group believes it is well placed to capitalise on value accretive growth opportunities and is therefore well placed to deliver long-term shareholder value.”

1      “Like-for-like” businesses are defined as those which traded under the Group’s ownership throughout both the period under review and the whole of the corresponding comparative period

2      Underlying profit before tax is presented excluding non-underlying items (see Note 6)

3      Adjusted net cash is presented excluding the impact of the recognition of lease liabilities under IFRS16 (see the Net Debt Reconciliation)

4      Reported net cash includes the impact of the recognition of lease liabilities under IFRS16 (see the Net Debt Reconciliation)

5      Registrations as reported by the Society of Motor Manufacturers and Traders

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