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Marshall issues positive trading statement after 'unexpected' share price fall

Marshall Motor Holdings has issued a positive trading statement after an unexpected – and unexplained – share price fall.

In an unscheduled trading update the group said it has noted the fall in price, but "knows of no reason for this movement" apart from "general speculation surrounding the potential impact of Brexit on the UK economy".

Shares fell from 156.9p on October 12 to 137p yesterday.

But the trading statement said that since June 30 the group has enjoyed "material growth" in revenue and profit on the back of the acquisitions of SG Smith and Ridgeway.

Like-for-like business has also enjoyed strong revenue, while aftersales revenues have grown.

The statement reads: "This full year outlook would represent a significant improvement in earnings per share versus that achieved in the year ended 31 December 2015."

"Given this, the company believes it is appropriate to provide an update on trading since it released its interim results on 16 August 2016 and to reiterate that the board's outlook for the full year remains in line with its previous expectations.

"Specifically, this full year outlook would represent a significant improvement in earnings per share versus that achieved in the year ended 31 December 2015."

Marshall will release a pre-close trading update for the financial year to December 31 in January.

Vertu Motors' shares also dropped in value from October 12 to 17, from 46p to 42.2p; Cambria Automobiles from 61.5p to 58p and Lookers 107.3p to 97.5p. 

Analyst Mike Allen, at Zeus Capital, said: "Investors are clearly looking out to 2017/18 and the impact of sterling as well as lower household spending as higher inflation takes hold.

"While we believe there is scope for earnings pressure in 2017 across the sector, we believe the sector on the whole will weather this much better than 2008 driven by better systems/processes, shorter buying cycles, a larger UK parc driving more aftersales opportunities as well as OEMs effectively financing residual values to name but a few."  

Marshall Motor Holdings on-month share price (Source: London Stock Exchange)

Marshall one month share price Sept - Oct 2016

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