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Marshall upgrades 2020 profit forecast after outperforming car retail market

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Marshall Motor Holdings has upgraded its profit forecast for 2020 after it “significantly outperformed” the UK car retail market in October and November.

The top AM100 2020 car retail group PLC has said that it is now anticipating an underlying profit before tax for the year ending December 31, 2020, of "not less than" £19m.

In a statement issued via the London Stock Exchange this morning (December 9), the group said that recent performance in aftersales and the sale of new and used vehicles via ‘click and collect’ during COVID-19 ‘Lockdown 2’ in England meant that it was able to upgrade the predicted result from the £15m stated back in October.

Noting the uncertainties that still lie ahead, the group said: “There continues to remain significant social and economic uncertainties as a result of both COVID-19 and the potential impact of the UK's departure from the European Union on 31 December 2020.  

“Whilst the board is pleased with the group’s response to the significant challenges presented by COVID-19 in 2020, demonstrating the strength and resilience of the group’s business, it has also benefited from a number of well-documented sector tailwinds in 2020 and therefore remains cautious over the trading environment for 2021.”

Marshall said that it had benefited from “previously reported sector tailwinds” during October, with new retail unit sales up on a like-for-like basis and significantly outperforming the UK registration figures reported by the Society of Motor Manufacturers and Traders (SMMT).

Like-for-like used car unit volumes also performed strongly, it said. 

Marshall said that its outperformance of the new retail car market for October and November combined was 9.8% on a like-for-like unit sales basis. 

Like-for-like used vehicle unit sales were down 12.7% in the same period, with like-for-like aftersales revenues down just 3.8% year-on-year.

Commenting on the challenges presented by November trading, it added: “Whilst trading was negatively impacted by the closure of its showrooms throughout November, the group was able to continue to operate all of its aftersales businesses, take orders online and by telephone and deliver new and used vehicles through ‘click and collect’ services. 

“The group’s strong outperformance of the wider new car market continued.”

Marshall said that it had continued to trade well since the reopening of its showrooms on following ‘Lockdown 2’, on December 2.

Government’s continuation of the Coronavirus Job Retention Scheme (CJRS) and other fiscal measures to support business enabled the Marshall to protect “the overwhelming majority of jobs” within the group.

It was able to enhance furloughed colleagues’ pay, however, while implementing voluntary reductions in pay and fees by the board, operational directors and other senior managers.

The group said that it has also voluntarily repaid all amounts from which it benefitted under the Government's VAT Payment Deferral Scheme (£10.9m) 18 months early. 

Today’s statement added: “It is the Group’s current intention not to utilise the Coronavirus Jobs Retention Scheme in 2021.”

Marshall’s adjusted net cash position (excluding IFRS16) at November 30 was £29.8m.

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