With the government allowing car dealerships to reopen from 1 June 2020, Marshall Motor Holdings (MMH) has issued a trading update and plans to progressively return to full operation in a COVID-19 secure fashion. The protection of both its employees and customers remains the company’s paramount consideration. Financially MMH appears to have weathered the shutdown well with adjusted net debt (excluding IFRS 16 leases) of £3.2m at 31 May, although it expects to report an H120 loss before tax in August. The major question is the pace of demand recovery and that still depends on the uncertainties caused by the pandemic. Guidance was withdrawn as lockdown started and, given the uncertain H220 prospects, we are not reinstating estimates yet. MMH looks well positioned to resume trading.
Secure return to operations
Aftersales operations reopened to all last week. Now all 117 showrooms and other operations are reopen following stringent risk assessments, the adoption of new operating procedures and protocols, and mandatory staff training. Initially around 50% of employees should return to work, and more will do as markets hopefully recover to more normal demand levels. Banks and other lenders appear supportive and the refinancing of the £120m RCF due in June 2021 is progressing, with a likely temporary revision to covenants and a market-led increase in interest rates.
Marshall Motor Holdings Plc (LON:MMH), together with its subsidiaries, engages in retailing passenger cars and commercial vehicles in the United Kingdom. It sells new and used vehicles; and provides after sales services, such as servicing, body shop repairs, and parts sales.
