6 Oct 2021 07:00
6 October 2021
MARSHALL MOTOR HOLDINGS PLC
("MMH" or the "Group")
Trading Update - further increase to FY2021 expectations
Marshall Motor Holdings Plc, one of the UK's leading automotive retail groups, provides the following trading update and announces a further increase to its full year expectations for 2021.
In August 2021, the Group announced its expectation that full year profits for the year ending 31 December 2021 would be not less than £40 million. It also noted the uncertainties for H2 2021 and beyond surrounding well-documented vehicle supply issues, an expected realignment of used vehicle values (the timing of which was uncertain) and the continuing impact of the COVID-19 pandemic.
New vehicle supply constraints caused by the global shortage of semi-conductors have deteriorated throughout August and the important plate-change month of September and are expected to continue through 2022. Whilst consumer demand and order-take has remained strong, delivery times for new vehicles have been significantly extended. As a result, on 5 October 2021, the SMMT reported that new car registrations in September were down 34.4% from the same period last year, bringing new car registrations for Q3 2021 down 31.1% compared to growth of 5.9% in the year-to-date.
Despite a significant number of the Group's key brands being more impacted by new vehicle supply constraints, pleasingly, the Group continued its track-record of outperforming the wider new car market in September. In Q3 2021, the Group's like-for-like new vehicle unit sales outperformed the wider new vehicle market by 13.0% and have outperformed the wider new vehicle market in the year-to-date by 11.6%. The Group has benefited from exceptionally strong new car margins as a result of supply shortages which has offset the impact of reduced volumes.
The used car market has continued to benefit from previously reported exceptional market tailwinds as a result of new car supply shortages and so the impact of any downward price realignment in Q4 2021 is not anticipated to be significant. In Q3 2021, used vehicle values rose by an average of 12.7%*. This was the seventh month of consecutive growth in used vehicle values and over this period, used vehicle values have appreciated by 26.3%*; an unprecedented position.
The Group has capitalised on these tailwinds, continuing its investment in used vehicle procurement, pricing utilising technology and real-time market data, improved online product presentation and marketing the marshall.co.uk brand through advertising and sponsorship initiatives. This focus, together with market tailwinds, resulted in an exceptionally strong margin performance in used cars in Q3 2021, more than offsetting a decline in volumes as a consequence of used vehicle supply shortages.
Whilst there remains continued uncertainty over vehicle supply and the timing of a realignment to more usual market conditions, given the continuation of favourable market conditions and the Group's strong operational performance throughout Q3 2021, the Board now expects that continuing underlying profit before tax for 2021 will be not less than £50m. This figure is after the commitment to repay all CJRS and non-essential retail sector grants received for this financial year.
ENDS
* average based on 3-year-old, 60,000 mile vehicles
For further information and enquiries please contact:
Marshall Motor Holdings plc | c/o Hudson Sandler |
Daksh Gupta, Chief Executive Officer | Tel: +44 (0) 20 7796 4133 |
Richard Blumberger, Chief Financial Officer
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Investec Bank plc (Financial Adviser, NOMAD & Broker) | Tel: +44 (0) 20 7597 5970 |
Christopher Baird |
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David Anderson
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Hudson Sandler | Tel: +44 (0) 20 7796 4133 |
Nick Lyon Bertie Berger |
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Nick Moore |
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Notes to Editors
About Marshall Motor Holdings plc (www.mmhplc.com)
The Group's principal activities are the sale and repair of new and used vehicles. The Group's businesses have a total of 116 franchises covering 22 brands, across 29 counties in England. In addition, the Group operates six trade parts specialists, two used car centres, six standalone body shops and one pre delivery inspection centre.
In April 2021 the Group was recognised by the Great Place to Work Institute, being ranked the 12th best place to work in the UK (super large company category). This was the eleventh year in succession that the Group has achieved Great Place to Work status.
LEI number: 213800BP3HZWHDWXAY78
This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the Group is Stephen Jones, Group Counsel and Company Secretary.
This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. The Group undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.