Marshall Motor Holdings Plc (LON:MMH), one of the UK’s leading automotive retail groups, has provided the following unscheduled trading update given significant upgrades to both first half and full year expectations for 2021.
The market has continued to benefit from positive tailwinds, including a recent unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles. In addition, the Group has continued its strong outperformance of the wider new and used vehicle markets.
As a result, the Group expects to report an exceptionally strong first half performance in both profit and cash generation when it issues its interim results on 10 August 2021.
There remains a high level of uncertainty over the second half of 2021, and possibly longer, given the potentially significant impacts of new vehicle supply issues as a result of a well-documented worldwide shortage of semi-conductors, a realignment of used vehicle values and the continuing impact of the COVID-19 pandemic. To date, supply issues have had limited impact on the Group’s sales volumes, however supply in both new and used vehicles has tightened and there are signs that these issues will become more acute in the second half of the year and maybe beyond.
As a result, there are a wide range of possible outcomes for the Group’s full year results. Despite having committed to repay £4.0m of Government support, as previously announced, the Board now expects that continuing underlying profit before tax in 2021 is likely to be significantly ahead of current market expectations and well ahead of the Group’s historic record result.
As previously stated, the Board understands the importance of dividends to shareholders and intends to resume the payment of dividends as soon as possible. It will consider the position next at the time of the release of its interim results on 10 August 2021.
