Marshall Motor Share Discussion Threads

[edmundshaw] 15/3/2018 12:53

net non-current assets after goodwill is £110m, or £1.37 per share. Subtract the negative current assets and it's around 94p per share. But still a healthy balance sheet. And all that goodwill is far from worthless... we are buying businesses not lumps of gold.

[ed gasket] 15/3/2018 10:19

Tangible assets are 90p though NOT 247p which is mostly goodwill.

[this_is_me] 14/3/2018 08:17

Yes, I am delighted to have made a larger than my usual investment here. A well run company that is going to be a long term winner throughout the ups and downs of the motor retail industry.

[edmundshaw] 14/3/2018 08:02

Not for the first time I agree with you. Already overweight in these or I would add.

Top management here imo.

[jaf111] 14/3/2018 07:49

Excellent results all things considered....net assets per share £2.47, divi up 16%....

Not for the first time I say MMH is ridiculously good value....

[55biker] 07/3/2018 16:31

Nice bit of movement today.

Hope the results next week are encouraging because by all accounts the share price should be at least £2 bearing in mind the net asset value of this company.

[55biker] 31/1/2018 10:42

Seems ridiculous doesn't it?

No change earlier and now down in the 150's again on little selling!

Talk about an out of favour industry.

Bet even if the Finals in March are impressive the Brokers will ignore it.

[55biker] 12/1/2018 11:30

Very good news and maybe some more acquisitions lined up during 2018?

Still rated a firm buy by Analysts and Motley Fool and with an share price well below true market value also surprised at the lack of progress North.

[mortimer7] 11/1/2018 08:56

Very impressive performance reported this morning. I agree the strength of their B/S will give them the opportunity to make acquisitions as the smaller independents begin to struggle.

[jaf111] 11/1/2018 08:51

Yes very strong update but perhaps no surprise by lack of market interest.

At some point this will change and I would then expect that the likes of MMH will outperform its peers especially with its stronger Balance Sheet post sale of leasing business.

Having said that I would not be surprised to see further acquisitions in due course, particularly if the new vehicle market remains weaker, thereby offering up some bargain deals

[dangersimpson2] 11/1/2018 08:33

Surprised this isn't stronger given today's trading statement.

Debt reduction was known but FY17 beat wasn't, given very weak overall new car market and P/E of 6 you would have thought the market was expecting the opposite!

[this_is_me] 11/1/2018 07:45

Great update. Excellent progress. Being ignored by the chattering classes is usually a good sign!

[edmundshaw] 21/11/2017 08:04

Looks like a good practical managment decision today. With a site to be disposed and vehicles to be relocated or sold off, likely cash impact looks minimal. I do hope those losing their jobs will land on their feet...

[55biker] 30/10/2017 11:58

Not sure what the asset backing ps was for PDG but compared to MMH the current share price seems so low maybe it might be looking attractive as a take over opportunity now? Think it would only need some good Brexit news to come out re: motor trade prospects and the share price might go north very quickly.

[edmundshaw] 24/10/2017 15:40

Pendragon (PDG) results yesterday had an effect on the share price - albeit more muted than it might have been, but then the valuation of PDG was pretty toppy. MMH remains at a very low price and still compares very favourably with PDG.

With a good and well covered dividend there is no real issue in outlasting a 6-12 month downturn in the new car market, assuming that reads across from PDG.

[55biker] 03/10/2017 14:34

Nice to see some upward movement again today but if the share price hits £1.80 it's still way below what it should be. With asset backing of £2.50 ps it still looks very cheap!

[jeff h] 21/9/2017 16:12

Yes edmund everything has a price...you get the impression though that they are
looking to be predator rather than prey and looking to buy a competitor.

[edmundshaw] 21/9/2017 15:29

Jeff yes, the sale is completely in the hands of the Marshall family, and I don't suppose they are in a hurry to sell. But who knows if the price is right?

[jeff h] 21/9/2017 15:12

Edison view:-



The company has a 65% controlling shareholder edmund so would need their agreement
for a takeover.

[edmundshaw] 21/9/2017 14:20

Excellent interviews (if a bit contrived), thanks for the link Jeff.

Underlines the cheapness of the shares: selling this non-core business for 35% of the market cap, net assets £2.54p with a good chunk of that in real estate. If I were a competitor with cash, I would certainly be running over this with the old slide-rule...

[jeff h] 21/9/2017 10:54

BRR Media interview:-

[davebowler] 21/9/2017 10:46

Zeus;
Marshall Motors have announced this morning the disposal of their leasing business, subject to FCA approval, to Northridge Finance for a gross cash consideration of £42.5m (11.5x 2016A PAT). We see this as a positive for MMH, allowing the group to strengthen the balance sheet, focus the business model and reduce exposure to used car residual values at a time of uncertainty. The Disposal is expected to be dilutive to underlying earnings per share in the year ending 31 December 2017 although there will be a significant gain on disposal. We leave our forecasts unchanged for the moment and will update post FCA approval and formal completion.
Disposal: Following a strategic review of Marshall’s leasing business (MLL) MMH has agreed to sell MLL to Bank of Ireland, subject only to approval of the transaction by the FCA. The gross cash consideration of £42.5m (11.5x 2016 earnings) will be due on completion. On completion, MMH will enter into a transitional services arrangement to enable the smooth integration of MLL into Bank of Ireland and an agreement for the supply of new vehicles by MMH to MLL. Continued consolidation in the leasing and fleet management sector is making scale an increasingly important factor, in a very capital intensive business model. The disposal of the leasing business allows MMH to reduce leverage allowing greater flexibility in the balance sheet and allows the group to focus its business model and financial resources on delivering further growth in the core retail business. While the leasing business is asset backed, the significant debt associated with the business increased balance sheet risk, in our view and we believe the business will be in a significantly improved financial position post completion of the deal.
Financial impact: The net cash proceeds of the Disposal will initially be used to reduce existing levels of indebtedness and settle a c.£1.0m pension liability. The group has incurred c.£1.7m of exceptional costs as a result of the transaction and will realise a significant gain on disposal during the period. The Group’s reported net debt at 30 June 2017 was £101.1m. As a result of the Disposal, the Group’s pro forma 30 June 2017 balance sheet would have been un-geared with net cash of approximately £4.6m. We have previously highlighted the level of gearing in the business relative to sector peers has been high and see this disposal and the deleveraging as a positive for the business, especially given the growing uncertainty in the sector. In the year ended 31 December 2016, MLL generated total revenue of £39.3m, an underlying profit before tax of £4.9m and profit after tax of £3.7m.
Investment view: If the Disposal had been completed on 30 June 2017, MMH would have had pro forma net assets at that date of approximately £196.7m (equivalent to 254p per share) and pro forma net cash of approximately £4.6m. The shares are trading at a discount to NAV and a clear P/E and EV/EBITDA discount to the sector, given the improved strength of the balance sheet and more focused business model there is potential for this discount vs the peer group to close.

[jeff h] 21/9/2017 10:45

N+1 Singer view:-

Marshall Motors has announced the sale of its Leasing division to the Bank of Ireland for £42.5m. The disposal will be dilutive (of the order 13% in FY18) but significantly improves the B/Sheet, moving it to a pro-forma net cash position of £4.6m as at the half year ended in June. Full year forecasts for net debt of £53m (excluding the asset backed Leasing debt) will move to net debt of c£10m. The market had been looking at ‘total’ debt though including Leasing, and from that perspective the disposal is transformational, reducing forecast net debt from £116m to c£10m.

As part of the sale various ongoing service and supply arrangements have been agreed with the buyer, meaning that there should not be any material loss of intersegmental synergy benefits for Retail in the short term. The improved balance sheet and financial flexibility positions Marshall well, both defensively and in terms of resource for any future growth initiatives or M&A, which the company again reiterates it is well placed for.

Using our sum off the parts analysis we estimate the market had effectively been assigning a negative value of c£40m for Leasing. Today's disposal for £42.5m should therefore have a materially positive impact on the share price. Putting MMH on just the peer group average (i.e. incl PDG) would point towards fair value north of 200p, with increased scope for accretive M&A.

[55biker] 21/9/2017 10:41

This leasing disposal looks like a great deal for MMH ............over £100M strengthening of the Balance Sheet .....strong cash generation .........£120 RCF ....now debt free and cash in hand ........over £100M of freeholds ........it wouldn't surprise me if they are now planning another big acquisition!

And with net assets of £2.50 per share the current share price is looking even more ridiculous!