Marshall Motor warns of 'weakening' conditions; buys VW franchises

Marshall Motor Holdings said it was on course to meet full year expectations despite weakened fourth quarter conditions, while it also announced a £22.3m acquisition.

The auto dealer on Wednesday said the UK retail market had remained challenging due to weak consumer confidence as a result of Brexit uncertainty, ongoing cost headwinds and vehicle supply constraints.

Meanwhile, the AIM-traded company said it had bought the business and assets of a portfolio of Volkswagen and ŠKODA passenger and commercial vehicle franchises from Jardine Motor Group UK for up to £22.3m in cash.

The businesses were expected to be earnings dilutive in 2020 and 2021, having reported aggregate revenue of £212.8m and a loss before tax of £2.8m for the year ended 31 December 2018. However, the deal is expected to be earnings enhancing from 2022 onwards.

Chief executive Daksh Gupta said: "While the acquired businesses are currently loss making, we are confident in their future potential. The businesses are in excellent locations that are contiguous to our existing Volkswagen and ŠKODA franchises and each site is fully compliant with the latest brand requirements."

Marshall Motor Holdings shares were down by 3.90% at 148.00p at 0943 GMT.