Marshall Motor Holdings PLC Trading statement and notice of results (9946J)

TIDMMMH

RNS Number : 9946J

Marshall Motor Holdings PLC

04 July 2017

4 July 2017

MARSHALL MOTOR HOLDINGS PLC

("MMH" or the "Group")

Pre-close Trading Statement

and

Notice of Results

Strong First Half, Full Year Outlook Ahead of Expectations

Marshall Motor Holdings plc, one of the UK's leading automotive retail and leasing groups, issues its pre-close statement ahead of the release on 15 August 2017 of its half year results for the six months ended 30 June 2017 ("H1") ("Period").

During H1 the Group has continued to deliver further material improvements in profitability compared with the corresponding period last year. This has been driven by continued like-for-like* revenue growth together with the contribution from Ridgeway Garages (Newbury) Limited ("Ridgeway"), acquired on 25 May 2016.

Retail Segment

During H1, the Group's retail segment has shown significant growth in both revenue and profitability, benefitting from a material contribution from Ridgeway. Performance in the first quarter was particularly strong as some customers pulled forward new car purchases ahead of changes to Vehicle Excise Duty which took effect on 1 April 2017 and the timing of Easter after the end of the quarter.

As widely expected, during the first five months of 2017 the UK new car market declined, with a fall in UK registrations to retail customers partially offset by growth in registrations to fleet customers. Encouragingly, against this UK market backdrop, over the same period the Group outperformed the new car retail market. As anticipated, the Group experienced a like-for-like decline in unit sales to fleet customers over this period following a commercial decision to withdraw from some low margin business.

Like-for-like sales of used vehicle units during H1 showed good growth with a strengthening trend throughout the Period, although there was ongoing margin pressure.

Like-for-like growth in after-sales revenues has continued throughout H1.

Leasing Segment

During H1, the Group's leasing segment has continued to enjoy good levels of profitability, albeit below the exceptional levels reported in H1 2016. This was due in part to a reduced level of disposals during the Period.

At 30 June 2017, the leasing segment's fleet consisted of 6,290 units compared to 6,192 units as at 31 December 2016. A number of new customer wins during the Period and a strong unfulfilled order bank leaves the leasing segment well positioned to deliver future fleet growth.

Unallocated Segment

In line with expectations, unallocated central costs during the Period were above the comparable period last year.

Financial position

The Group's net debt position at 30 June 2017 was in line with our expectations. The Group's balance sheet remains strong, underpinned by a strengthening mix of freehold / long-leasehold property.

Portfolio development

The strategic acquisition of Ridgeway extended the Group's footprint into new and attractive geographical territories and has greatly increased the Group's scale with key brand partners. The integration of Ridgeway is progressing as planned and is nearing completion.

As previously announced, during the Period the Group completed the acquisition of Leeds Volvo, further strengthening its position as the largest franchise partner of Volvo Car UK by number of sites.

In addition, the Group completed the sale of a vacant freehold site in Totton, Southampton, acquired as part of the acquisition of Ridgeway, for GBP2m.

Outlook

The Group has delivered a strong performance during H1, particularly in the first quarter.

The Board is cognisant of the economic and political uncertainty following the UK referendum on EU membership and industry forecasts for continuing declines in the UK new car market. The Board therefore remains cautious. Nonetheless, given the strong performance during H1, the Board's current outlook for the full year is now ahead of its previous expectations.

Overall, the Group remains well positioned and continues to seek to drive further growth in its profitability and return on capital, supported by a balanced portfolio of brands, attractive geographic locations and excellent brand partner relationships.

Interim Results

The Group will announce its interim results for the six months ended 30 June 2017 on 15 August 2017.

This announcement contains inside information.

*Like-for-like businesses are defined as those that traded under the Group's ownership throughout both the period under review and the whole of the comparative period.

Ends

For further information and enquiries please contact:

 
 Marshall Motor Holdings plc          c/o Hudson Sandler 
 Daksh Gupta, Group Chief Executive   Tel: +44 (0) 20 
                                       7796 4133 
 Mark Raban, Chief Financial 
  Officer 
 
 Investec Bank plc (Financial         Tel: +44 (0) 20 
  Adviser, NOMAD & Broker)             7597 4000 
 Christopher Baird 
 David Flin 
 David Anderson 
 
 Hudson Sandler                       Tel: +44 (0) 20 
                                       7796 4133 
 Nick Lyon 
  Alex Brennan 
 Bertie Berger 
 

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 through Marshall Motor Group and the leasing of vehicles through Marshall Leasing. The Group's businesses have a total of 104 franchises covering 24 brands, operating from 90 locations across 26 counties in England. In addition, the Group operates five trade parts specialists, four used car centres, five standalone body shops and one PDI centre.

In May 2017 the Group was recognised by the Great Place to Work Institute, being ranked the 22(nd) best place to work in the UK (large company category). This was the seventh year in succession that the Group has achieved Great Place to Work status.

In November 2016 Marshall Leasing was named Fleet Service Company of the Year 2016 by the Association of Car Fleet Operators (ACFO), an award it also won in 2010 and 2013.

Cautionary statement

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 and undue reliance should not be placed on any such statements because they speak only as at the date of this document and 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. MMH 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 04, 2017 02:00 ET (06:00 GMT)