Marshall Motor Holdings performs in line amid challenging market

Automotive retailer Marshall Motor Holdings updated the market on its trading on Thursday, ahead of its half-year results, reporting that the UK new and used car markets remained “challenging”, with volume pressures and cost headwinds for the retail sector combining with recent margin pressure in the used car market.

The AIM-traded firm said during the period, it outperformed the market in both retail and fleet new vehicle unit sales, saw continued strong growth in used vehicle unit sales and achieved further growth in after-sales revenues.

That helped to mitigate the impact of the challenging market conditions, the board said, with the group expecting to deliver a first-half underlying profit before tax in line with the board's expectations.

The group said it delivered “strong” cash generation during the period, adding that it expected to report a positive net cash position of approximately £5m as at 30 June, compared to net debt of £5.1m on 31 December.

“This was achieved notwithstanding the previously reported £6.0m paid to complete the process of eliminating all outstanding historic defined benefit pension liabilities, the £3.5m investment made in the acquisition of six Škoda dealerships, the subsequent £1.7m paid to acquire the freehold property at Northampton Škoda, and £1.7m of incremental dividend payments compared to the prior year following the change to the group's dividend policy,” the board said in its statement.

Marshall Motor said it continued to manage working capital “robustly”, and work with its brand partners to control capital expenditure.

The board said that despite challenging market conditions, the group had delivered a “strong” first half unit sales performance, ahead of both the new and used car markets and underlying profit before tax, in line with its expectations.

“Given continued weak consumer confidence as a result of ongoing political uncertainty over Brexit, ongoing cost headwinds for the retail sector and further potential new vehicle supply constraints in the lead up to the implementation of further emissions-related regulations on 1 September, the board believes it is right to remain cautious regarding the outlook for the remainder of the year,” it said.

“Nevertheless, the board's current outlook for the full year remains unchanged.”

Marshall Motor Holdings said it would announce its interim results for the six months ended 30 June on 13 August.