Marshall resumes dividend payments after reporting record H1

Marshall Motor Group has resumed the payment of dividends to its shareholders after delivering record revenues in a COVID-19 impacted first half of 2021.

In interim results published via the London Stock Exchange this morning (August 10), Marshall reported £1.33 billion in revenues for the period to June 30, up 49% year-on-year (H1 2020: £895.3m) as its underlying pre-tax profits rose 426.6% to £38.4m from a restated loss of £11.4m a year ago.

The group’s record underlying profit before tax was also more than double the £15.2m achieved in H1 2019.

And after repaying £4m in Government support, issuing its lowest earning staff a 4% pay rise in a backdated pay review and handing all 4,000 staff a “loyalty bonus" earlier this year, the AM100 PLC has now resumed the payment of dividends to its shareholders.

Marshall said that its H1 interim dividend of 8.86p per share reflected what had been an “exceptional first half performance”.

Marshall chief executive, Daksh Gupta, said: “The Group’s record performance in the first half of the year was exceptional.

“Whilst we acknowledge that this has been largely driven by unprecedented market conditions, particularly the used car market, we are proud of the contribution of our operational teams across the country for another period of strong market outperformance.

“On behalf of the board, I would like to thank all our colleagues, as well as our brand and business partners, for their continued support.”

Marshall’s H1 results showed a strong like-for-like market outperformance across both its new and used vehicle sales operations.

New vehicle volumes were up 46.1% to 15,566.

Used volumes rose by 51.7% to 28,094 as gross profit per unit rose 2.5ppts to 8.6%.

Aftersales revenues rose 34.8% to £132.2m (H1 2020: £100.3m) in the period, meanwhile.

The performance was delivered in a period which saw the group embrace a click and collect retail model to mitigate against the impact of COVID-19 lockdown.

The period also brought growth for the group, which acquired Heritage Automotive’s Cheltenham and Gloucester Jaguar Land Rover (JLR) dealership and Leicester Nissan from Renault Retail Group, adding a total cost of £16m.

Despite its growth and the market’s headwinds, Marshall today reported strong cash generation, with adjusted net cash of £57.2m (30 June 2020: £27.4m) at June 30 after £17.2m of freehold and acquisition expenditure and the fulfilment of its commitment to repay £4m of 2021 Government support.

Marshall’s balance sheet has also strengthened further, with net assets at June 30 of £239.3m (30 June 2020: £190.5m) equivalent to 305.9p per share; underpinned by freehold/long leasehold property of £139.6m.

Gupta said: “There remains a high level of uncertainty over the second half of 2021 and into 2022 given well documented vehicle supply issues, an expected realignment of used vehicle values (the timing of which is uncertain) and the continuing impact of the COVID-19 pandemic. 

“Given these uncertainties, there remains a range of possible outcomes for the year, however, the board expects that continuing underlying profit before tax for 2021 will be not less than £40m.”