MARSHALL MOTOR HOLDINGS PLC
(“MMH” or the “Group”)
Annual results for the year ended 31 December 2017
Marshall outperforms the UK market and delivers another record trading result
Marshall Motor Holdings plc, one of the UK's leading automotive retail groups, announces its results for the year ended 31 December 2017.
Financial summary
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FYR |
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FYR |
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Var |
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|
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2017 |
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2016 |
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% |
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|
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|
|
|
|
|
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Revenue £m |
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2,268.9 |
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1,899.4 |
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19.5% |
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Gross profit (%) |
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11.7% |
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11.6% |
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+8bps |
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Reported profit before tax £m |
|
53.1 |
|
22.2 |
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139.9% |
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|
|
|
|
|
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Underlying profit before tax* £m |
|
29.1 |
|
25.4 |
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14.4% |
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Continuing operations £m |
|
25.4 |
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20.5 |
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23.7% |
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Discontinued operations £m |
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3.7 |
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4.9 |
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-24.4% |
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|
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Basic earnings per share (p) |
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63.8 |
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23.0 |
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177.4% |
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Underlying earnings per share (p) |
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30.8 |
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26.2 |
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17.6% |
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Underlying continuing earnings per share (p) |
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26.9 |
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21.3 |
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26.3% |
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Dividend per share (p) |
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6.4 |
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5.5 |
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16.4% |
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Net Debt £m |
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2.2 |
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119.0 |
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-98.1% |
Highlights
· Good like-for-like** revenue growth of 3.5% with all revenue streams showing positive growth.
· Like-for-like new revenue +1.0%, used +7.0%, aftersales +2.3%.
· New car retail unit sales up 12.3% (like-for-like down 2.6% versus UK new retail market*** down 6.8%).
· Used car unit sales up 17.1% (like-for-like up 5.2% versus UK used market*** down 1.1%).
· Strong performance from aftersales, revenues up 20.0% (like-for-like up 2.3%) and further margin improvements.
· Strategic disposal of Marshall Leasing for a gross consideration of £42.5m before costs and expenses.
· Management action drives a material reduction in net debt at 31 December 2017 £2.2m (2016: £119.0m).
· Balance sheet further strengthened with net assets per share of £2.47 (2016: £1.88). Freehold / Long leasehold property £116.3m. £120m committed revolving credit facility undrawn at 31 December 2017.
· Full year dividend up 16.4% at 6.4p per share (2016: 5.5p).
Daksh Gupta, Group Chief Executive, said:
“Despite the more challenging market backdrop, the Board is pleased to announce another record financial performance which was ahead of our previously upgraded expectations. During 2017 we took a number steps, including the strategic disposal of Marshall Leasing, to prepare the Group for the future. We are now focused exclusively on our motor retail business and with a significantly strengthened balance sheet remain ideally positioned to exploit future opportunities.
“The Board notes the latest Society of Motor Manufacturers and Traders ('SMMT') UK new car market forecasts for a decline of 5.6% in 2018. As a consequence the Board therefore remains cautious about the UK car market in 2018 as it returns to a more normalised level. Our trading performance in the current financial year to date is in line with our expectations and our outlook for the full year remains unchanged.
“I would like to take this opportunity on behalf of the Board to thank our entire team and our brand partners for their continued support.”
*underlying profit before tax is presented excluding non-underlying items as set out in Note 4.
**like-for-like businesses are defined as those which traded under the Group's ownership throughout both the entire year under review and the corresponding comparative year.
***as reported by The Society of Motor Manufacturers and Traders.
For further information and enquiries please contact:
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Marshall Motor Holdings plc |
c/o Hudson Sandler |
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Daksh Gupta, Chief Executive Officer |
Tel: +44 (0) 20 7796 4133 |
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Mark Raban, Chief Financial Officer
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Investec Bank plc (Financial Adviser, NOMAD & Broker) |
Tel: +44 (0) 20 7597 5970 |
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Christopher Baird |
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David Flin |
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David Anderson
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Hudson Sandler |
Tel: +44 (0) 20 7796 4133 |
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Nick Lyon |
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Bertie Berger |
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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 through Marshall Motor Group. The Group's businesses have a total of 101 franchises covering 23 brands, operating from 84 locations across 26 counties in England. In addition, the Group operates five trade parts specialists, three used car centres, five standalone body shops and one pre delivery inspection centre.
In May 2017 the Group was recognised by the Great Place to Work Institute, being ranked the 22nd best place to work in the UK (large company category). This was the eighth year in succession that the Group has achieved Great Place to Work status.
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.
Marshall Motor Holdings plc
Annual results for the year ended 31 December 2017
Chairman's Statement
Introduction
I am delighted to present our Annual Report and Accounts for the year ended 31 December 2017 (the “Year”). Whilst the market backdrop for the Year was a more challenging one, the Group has strongly outperformed the UK car market and we are pleased to be reporting another record set of results at both revenue and underlying profit before tax ('underlying PBT')*. We have also taken significant steps to prepare the Group for the future.
Strategy
Since our IPO three years ago, the Group has, in line with its stated strategy, delivered material growth both organically and through the acquisitions of SG Smith in November 2015 and Ridgeway in May 2016.
In 2017 we focused on preparing for the next stage of the Group's development and growth. The strategic disposal of our leasing business Marshall Leasing Limited ('Marshall Leasing') in November 2017, for gross consideration of £42.5m (before costs and expenses), combined with ongoing portfolio management and the closure of a number of sub-scale, loss-making sites, has reduced our cost base, significantly strengthened our balance sheet and enabled us to focus exclusively on our retail businesses. As a result, we are well positioned to continue to deliver our future growth aspirations.
Results
The Group has enjoyed another record year, delivering 19.5% revenue growth and 14.4% underlying PBT growth.
Our net debt was effectively eliminated following the disposal of Marshall Leasing and was £2.2m at 31 December 2017 (2016: £119.0m). The Group's significantly strengthened balance sheet remains underpinned by £116.3m of freehold/long leasehold property.
Dividend
The Group's stated dividend policy is to maintain a progressive dividend policy where dividends are covered between 4 to 5 times by underlying earnings. The Board is, therefore, pleased to recommend a final dividend of 4.25p per share which, with the interim dividend of 2.15p per share, gives a total dividend for the Year of 6.40p per share (2016: 5.50p, up 16.4%).
If approved by shareholders at our AGM on 22 May 2018, the final dividend will be paid on 25 May 2018 to shareholders who are on the Company's register at close of business on 27 April 2018.
AGM
Our annual general meeting will be held on 22 May 2018 and I look forward to meeting all shareholders who are able to attend.
Outlook
The Board notes the latest Society of Motor Manufacturers and Traders ('SMMT') UK new car market forecasts for a decline of 5.6% in 2018. As a consequence the Board therefore remains cautious about the UK car market in 2018 as it returns to a more normalised level. Our trading performance in the current financial year to date is in line with our expectations and our outlook for the full year remains unchanged.
The Group has a strong brand mix, attractive geographic territories and excellent brand partner relationships and is well placed to continue to outperform the UK new car market. The strategic disposal of Marshall Leasing allows the Group to focus on its core motor retail business.
Finally, I would like to thank the Board, the executive team, our brand partners, business suppliers and colleagues throughout the Group for their support during another successful year.