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Marshall says H1 profits meet expectations and capex under control

Marshall Skoda

Marshall Motor Holdings expects its first half profits to be in line with expectations, and said it has outperformed the market in both retail and fleet new vehicle sales.

Continued strong growth in used vehicle volumes and in aftersales revenues have helped to mitigate the impact of challenging market conditions, said the top 10 AM100 dealer group.

But it warned of volume pressures and cost challenges in the car markets, plus recent margin pressure particularly in used car sales.

“Despite challenging market conditions, the group has delivered a strong H1 unit sales performance, ahead of both the new and used car markets and underlying profit before tax in line with the board's expectations.

“Given continued weak consumer confidence as a result of ongoing political uncertainty over Brexit, ongoing cost headwinds for the retail sector and further potential new vehicle supply constraints in the lead up to the implementation of further emissions-related regulations on 1 September 2019, the board believes it is right to remain cautious regarding the outlook for the remainder of the year. Nevertheless, the board's current outlook for the full year remains unchanged,” said Marshall’s statement.

Marshall said it continues to manage working capital robustly and is working with its manufacturer partners to control capital expenditure.

In 2017 its retail capital expenditure was £24.4m, including opening Audi Exeter and JLR Newbury.

In 2018 it invested a further £19.6m into its property portfolio, including JLR Lincoln, Cambridge Ford and Bedford Land Rover.

At the time, Marshall said 84% of its facilities had received corporate identity upgrades or relocations, and it expected this “to materially reduce after 2019”.

The group this week said it delivered strong cash generation during H1 2019 and expects to report a positive net cash position of about £5m at 30 June 2019 (31 December 2018: net debt of £5.1m), despite having paid out almost £13m on exceptional expenses such as pension liabilities, debt pay-down and acquisitions.

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