Marshall Motor Holdings ups its profit forecast to £19m from £15m
Cambridge-based Marshall Motor Holdings plc, one of the UK's leading automotive retail groups, saw its share price increase significantly after revealing that it is now anticipating an underlying profit before tax for the year ending December 31 of at least £19 million.
The group announced in October 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 of £15m.
It also notes that this guidance was 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, benefiting 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.
CEO Daksh Gupta said that whilst trading was negatively impacted by the closure of its showrooms throughout November, the group was able to continue to operate all of its after-sales businesses, take orders online and by telephone and deliver new and used vehicles through ‘click and collect’ services. Its strong outperformance of the wider new car market continued.
The outperformance of the new retail car market for October and November combined was 9.8 per cent on a like-for-like unit sales basis.
During the same period, like-for-like used vehicle unit sales were down 12.7 per cent with like-for-like after-sales revenues down just 3.8 per cent on the same period in 2019.
Since the reopening of its showrooms on December 2, the business has continued to trade well; its adjusted net cash position (excluding IFRS16) at November 30 was £29.8m.
Gupta said the company was wary of potential bear traps heading forward. It says 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 December 31.
While the board was pleased with the group’s response to the significant challenges presented by COVID-19 in 2020, demonstrating the strength and resilience of the business, it conceded that it had also benefited from a number of well-documented sector tailwinds in 2020. It therefore remained cautious over the trading environment for 2021.