Marshall Motor Group has reported an “exceptional” performance for the 2010 financial year.
Its annual report on the year to December 31, published yesterday and presented to the Marshall family at its Cambridge headquarters, reveals a rise in like-for-like turnover of 11.2%, with the overall figure up 28.5% to £581 million.
Net profit increased from £5.6m to £9.4m (£8.17m like-for-like, a rise of 46% on 2009).
Return on sale is now at 1.74% and return on capital employed 16.9%. The group generated £13.5m in cash, significant as it funds all acquisitions on profits.
CEO Daksh Gupta said the results were a vindication of the strategy introduced when he took up his post in 2008 based around his four ‘operational levers’: an “extraordinary” customer experience, operational excellence, excellent relationships with OEMs and a drive to maximise employee satisfaction.
He said: “This is an exceptional performance. But it is based around an obsession with getting the basics right.
"My management team, and through them, all staff are aware of the need to seize every opportunity to do business with a customer and make the experience for them as good as it can be.
“There is a zero tolerance policy in place now when it comes to poor customer care.”
As a result, Gupta said, there had been a 58% reduction in customer complaints in two years. Staff turnover is 22%.
The acquisitive AM100 group sold 11,602 new vehicles in the period, up 14.1% year-on-year (up 3.2% like-for-like compared to an overall market down 5.6%). Used car sales were up 16.3% overall (6.1% like-for-like on a market down 6%) to 16,619 units; labour hours increased 11% (2.1% like-for-like) and service absorption increased for a second year running from 66% to 77% (75% like-for-like).
Marshalls added 15 new businesses to the group in 2010, compared to seven the previous year. Each has been profitable in the first year of acquisition.
Gupta said the acquisitions would continue, with one being worked on now. There were caveats to growth: “Each acquisition has to be scalable, cash generative from day one, and with the express permission and blessing of our OEM partners.”
While full-year turnover, taking acquisitions into account, is at a run rate at around £750m, he said he had no wish to break the £1 billion mark.
“There is a danger of losing the effectiveness of the entrepreneurial family we have here if you get too big,” Gupta said.
“The other question for me is the number of people I can personally manage. I have six operational direct reports and can probably manage one more. Then I consider how many each of those can manage. This is what gives me a sense of how many businesses we can take on.”
Goals for the year include:
> Reduce staff turnover to 18-20%
> Better control of working capital, splitting the balance sheet so each site has direct ownership
> All sites to be in the upper quartile for CSI
> F&I business improvements
> Improve the social media offering (an iPhone app – “mobile used car stock locator” is in development
Jeremy has been a journalist for 30 years, 20 of which have been in business-to-business automotive. He was a writer and news editor on AM-sister brand Fleet News for three years before setting up the AM website. For the last five years he has been Bauer B2B’s head of digital helping to manage the digital assets of AM, together with Fleet News, Commercial Fleet, Rail and Smart Transport.
LRCambridge - 27/10/2011 07:57
If one of your four "key operating levers" is employee satisfaction then how have you had five sales managers dozens of sales staff and a number of employment tribunals in the last two years alone in just ONE of your sixty sites Edited for libel reasons.