Marshall Motors hits record results in H1 2021
10 August 2021
Marshall Motors has hit record figures for profit, revenue and gross margin in its half-year results for 2021. Marshall Motors recorded an underlying profit before tax figure of £38.4 million, even after repaying £4m of furlough support in 2021.
The increase comes against a 2019 H1 underlying profit of £15.2m. 2020’s first half results, impacted by Covid, recorded a loss of £11.8m.
Turnover for the group increased 49% on H1 2020 to £1.33 billion.
As stated earlier this month, Marshalls now expects underlying profit for the full year to exceed £40m.
Commenting on the results, Marshall CEO, 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.”
However, Mr Gupta also cautioned: “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 £40 million.”
Across the group gross margin in the first half of 2021 was a record 11.8%, an increase of 117bps versus the comparable period last year.
Gross profit in new vehicles was up £16.9m with an increase in gross margin of 85bps to 6.9%. The main driver behind the gross profit increase was the achievement of manufacturer bonuses as a result of significantly higher new vehicle sales compared to the comparable period in 2020 (albeit still down from historical norms).
For used cars, gross margin was 8.6% compared to 6.1% in H1 2020 and 6.6% in H1 2019.
The group also reported it would resume shareholder dividends with an H1 interim dividend of 8.86p per share.
Operational and Financial Performance
- Record first half revenue and margin driven by unprecedented market conditions, our strong market outperformance and robust operational controls;
- Record underlying profit before tax of £38.4m (H1 2020: underlying loss before tax of £(11.8m); H1 2019: underlying profit before tax of £15.2m);
- Strong cash generation with adjusted net cash at 30 June 2021 of £57.2m (30 June 2020: £27.4m) after £17.2m of freehold and acquisition expenditure; commitment to repay £4.0m of 2021 Government support;
- Balance sheet strengthened further; net assets at 30 June 2021 of £239.3m (30 June 2020: £190.5m) equivalent to 305.9p per share; underpinned by freehold/long leasehold property of £139.6m;
- Restoration of dividends; H1 interim dividend of 8.86p per share reflecting exceptional first half performance;
- Continuing underlying profit before tax for the full financial year expected to be not less than £40.0m.
- Strong like-for-like market outperformance across new vehicles (both retail and fleet) and used vehicles: o new vehicle unit sales up 46.1% versus overall market registrations6 up 39.2%;
* used unit sales up 51.7% versus overall used market unit sales, up 31.1%;
* aftersales revenue up 34.8%; - Acquisitions of Cheltenham and Gloucester Jaguar Land Rover and Leicester Nissan;
- Commitment to voluntarily repay all CJRS and non-essential retail sector government grants received inthe Period (c.£4.0m);
- One-off ‘thank you’ bonus paid to all colleagues (excluding directors);
- Eleventh year of being a ‘Great Place to Work’ and seventh year running of being ranked in the UK’s Best Workplaces.
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