Headlines For six months ended 30th June, 2018
• Revenue of £1.31bn (2017 – £1.36bn) • Statutory profit before tax of £44.9m (2017 – loss £16.1m) • Underlying profit before tax of £19.3m (2017 – £21.9m) • Maintained interim dividend at 1.0p for Ordinary shares and 3.0p for NVPO shares • Complex engineering project proceeding in line with the Board’s expectations • Marshall Aerospace and Defence Group (MADG) signed a C130 total support contract with the Bangladesh Air Force • Land to be utilised for the first stages of the WING development has been transferred into the joint venture entities • Planning permission submitted, jointly with our partners, for the development of Land North of Cherry Hinton • Despite a challenging UK new vehicle market, Marshall Motor Holdings plc reports underlying, continuing profit before tax marginally ahead of the record performance reported last year.
Chairman’s Statement
Following the challenges encountered during 2017, I am pleased to report steady progress during the first half of 2018. Since the year end we have continued to perform well against plan on the project that has necessitated provisions in the last two years. Costs have been contained within the estimates accounted for in our 2017 financial statements and we continue to advance steadily towards key technical milestones, including the completion of flight testing activities and delivery of the first aircraft to our customer in the next few weeks. We then enter a phase of in-country deployment, with continuing flight trials and testing the integration of the various sub-systems of the aircraft. Meanwhile, the second aircraft will return to the hangar to undergo the same modification programme, with anticipated hand over to the customer in the middle of 2019. Also within Marshall Aerospace and Defence Group, our relationship with Boeing goes from strength-tostrength through the receipt of new orders, the signing of a Memorandum of Agreement for modification work and the news that we will be receiving a 2017 Boeing Silver Performance Excellence Award, which provides a just reward for the focus and determination of the team. Similarly, through our close relationship with the UK Ministry of Defence and in line with our strategy to expand our C130 support activities internationally, we were delighted to facilitate the disposal of two ex-RAF C130s to the Bangladesh Air Force, as well as winning a multi-year contract to deliver a total support solution covering aircraft maintenance, logistics support and engineering services. In March, Marshall Group Properties (MGP) and our collaboration partners, Endurance Estates jointly submitted an application for outline planning permission for the development of 1,200 homes and community facilities on Land North of Cherry Hinton with an expected positive outcome early next year. MGP continues to work closely with the local councils, partners and advisors to bring both this and the Wing project closer to fruition. The construction of a new Engine Ground Running Enclosure, an enabling project for all of our residential housing development, commenced work in April, with an anticipated commissioning in the third quarter of next year. Marshall Motor Holdings plc (MMH) has delivered a positive performance in the period against an ongoing background of a challenging UK new car market. Sales of new retail units are in line with the new car retail market, although there remains ongoing margin pressure. Used unit sales have been consistent with the corresponding period last year, but with improved profitability. Aftersales revenues achieved further growth in the period. The Group continues to play an active part in the community. We have been proud to support the RAF 100 celebrations, whilst Cambridge LaunchPad, which we founded, has engaged with over 5,000 young students already this year, as the programme develops with more business and school partners. At the AGM I indicated that we were looking for a non-executive director with significant experience in the aerospace and defence sector. I am pleased to confirm that an excellent candidate has been selected and, following completion of formalities with his current employer, will be appointed in due course. I expect to make a formal announcement soon. Although market conditions remain mixed, the Board is pleased with the Group’s steady progress and has decided to maintain the interim dividend at 1.0p per share for both Ordinary and NVPO shares, and pay the priority dividend of 2.0p on the NVPO shares. These will be paid on 14th December, 2018 to all shareholders on the register at 23rd November, 2018.
Alex Dorrian CBE August, 2018