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Marshall Motor drives up sales despite weakening market
10th Mar 2020 07:53
(Sharecast News) - Marshall Motor Holdings hailed a strong year on Tuesday, despite a "sustained" period of market decline denting underlying profits.
The car dealership group said like-for-like revenues rose 2% to ?2.21bn, group revenues increased 4% at ?2.28bn and overall pre-tax profits were ahead 9% at ?19.6m.
Underlying operating profits fell 4% to ?33.1m, however, which it attributed to "market challenges". Like-for-like total new vehicle unit sales rose 0.3%, while market registrations fell 2.4%. The dividend remained unchanged at 8.54p per share.
The UK car industry has been rocked by weaker consumer confidence, causing demand to ease. Diesel cars have also fallen out of favour on concerns over emissions. According to data from the Society of Motor Manufacturers and Traders, there were 2.31m registrations in 2019, a 2.4% fall on 2018.
But Daksh Gupta, Marshall chief executive, said: "Despite a sustained period of market decline, [the group] has grown market share by outperforming in all of its key segments. The group delivered record total reported revenue and achieved like-for-like revenue growth. Despite market conditions, the business performed well.
"The board notes the latest forecast by the SMMT for a further decline in the UK new car market in 2020, of 2.6%. It is cognisant of the potential impact that uncertainly over the outcome of future trade agreement negotiations between the UK and the European Union may have on the automotive sector.
"The board therefore remains cautious, but our order book for the important March plate-change period is encouraging, and our outlook for the full-year is unchanged."
Shares in Marshall were off 2% at 140.0p as at 1245 GMT.
Andy Chambers, industrials analyst at Edison, said: "Marshall continued to perform robustly, although the pre-tax profit was slightly below our estimate, as the losses of recently acquired businesses at the year-end was slightly higher than we expected.
"We nevertheless have slightly increased our full-year 2020 pre-tax profit estimate to reflect the higher than expected 2019 sales."
Peter Ashworth, analyst at Shore Capital, said: "The group has delivered a strong financial performance in what was a very challenging year for the sector.
"Like-for-like operating profit fell by only 4.1% to ?33.1m, compared to last year's record result. The group's balance sheet also remains strong, underpinned by ?124.9m of freehold land and buildings."
The car dealership group said like-for-like revenues rose 2% to ?2.21bn, group revenues increased 4% at ?2.28bn and overall pre-tax profits were ahead 9% at ?19.6m.
Underlying operating profits fell 4% to ?33.1m, however, which it attributed to "market challenges". Like-for-like total new vehicle unit sales rose 0.3%, while market registrations fell 2.4%. The dividend remained unchanged at 8.54p per share.
The UK car industry has been rocked by weaker consumer confidence, causing demand to ease. Diesel cars have also fallen out of favour on concerns over emissions. According to data from the Society of Motor Manufacturers and Traders, there were 2.31m registrations in 2019, a 2.4% fall on 2018.
But Daksh Gupta, Marshall chief executive, said: "Despite a sustained period of market decline, [the group] has grown market share by outperforming in all of its key segments. The group delivered record total reported revenue and achieved like-for-like revenue growth. Despite market conditions, the business performed well.
"The board notes the latest forecast by the SMMT for a further decline in the UK new car market in 2020, of 2.6%. It is cognisant of the potential impact that uncertainly over the outcome of future trade agreement negotiations between the UK and the European Union may have on the automotive sector.
"The board therefore remains cautious, but our order book for the important March plate-change period is encouraging, and our outlook for the full-year is unchanged."
Shares in Marshall were off 2% at 140.0p as at 1245 GMT.
Andy Chambers, industrials analyst at Edison, said: "Marshall continued to perform robustly, although the pre-tax profit was slightly below our estimate, as the losses of recently acquired businesses at the year-end was slightly higher than we expected.
"We nevertheless have slightly increased our full-year 2020 pre-tax profit estimate to reflect the higher than expected 2019 sales."
Peter Ashworth, analyst at Shore Capital, said: "The group has delivered a strong financial performance in what was a very challenging year for the sector.
"Like-for-like operating profit fell by only 4.1% to ?33.1m, compared to last year's record result. The group's balance sheet also remains strong, underpinned by ?124.9m of freehold land and buildings."