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Barr Ellison Solicitors – commercial property
20 May, 2021 - 09:46 By Tony Quested

Tyre kickers sidelined as Marshall Motors lifts the hood on excellence

Shareholders today responded positively to an AGM trading statement from Cambridge-based Marshall Motor Holdings.

Although the UK share price increase was fairly modest, the rise alone was an achievement and shows the benefit of lifting the hood rather than kicking the tyres when assessing companies in this segment.

Despite the lockdown, MMH managed to achieve strong cash generation in the four months to the end of April and continued to outperform the market.

CEO Daksh Gupta was right to accentuate the many positives. He said: 
“Trading during the first fourth months of the year was clearly impacted by the closure of our physical showrooms during the third national lockdown. Despite this, we continued to operate effectively on a ‘click and collect’ basis as a result of our investment and focus on our online retailing strategy. 

“We are pleased to have continued to significantly outperform both the new retail and used car markets and to deliver a strong financial result for the Period.

“Our trading performance, strong financial position and commitment to our corporate responsibilities has led to our decision to repay all CJRS and non-essential retail sector grants received in this financial year. 

“Given the market tailwinds – from which both the group and the sector as a whole has benefitted – we believe repayment to be the appropriate and responsible action to take. 

“We remain extremely grateful for the support provided by the Government to the retail sector throughout the ongoing pandemic and we are very proud that we are able to repay this support.

“There are a range of possible outcomes for this financial year given the potential ongoing impact of COVID-19 and well-documented global semi-conductor supply shortages. 

“However, the business is currently targeting an underlying profit before tax for 2021 of not less than 2019’s result of £22.1 million having fully repaid all CJRS and non-essential retail sector grants received in this financial year.”

The group has a longstanding track record of being one of the sector’s leading consolidators and its strong balance sheet means it remains well positioned to take advantage of further growth opportunities as they arise. 

It continues to review a pipeline of potential acquisition opportunities to deliver accretive shareholder value growth. But MMH will only pursue acquisitive growth where it makes strategic and financial sense for its shareholders and in conjunction with its brand partners.

Showing similar caution given the pandemic backdrop, the company will restore dividend payments when it feels the time is right.

• As a bonus, and reflecting its commitment to its people, MMH has just been ranked in the UK's Best Workplaces league tables by the Great Place to Work Institute for the seventh year in succession.

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