Marshall Motor Holdings has upgraded June’s forecast of record profits for 2021 in a trading update predicting an underlying pre-tax profit of “not less than £40 million” for the year.
The AM100 car retail PLC said that the “significant increase in its full year expectations” had resulted from positive sector tailwinds, which included appreciating used car values and favourable supply to demand conditions for both new and used vehicles.
Marshall said that the £40m prediction would be met after its commitment to repay £4m in Government support, including CJRS and non-essential retail sector grants received for this financial year.
It also follows the group’s decision to issue its 4,000 staff a one-off cash "loyalty" bonus and a backdated pay review after outperforming the market as it emerged from a COVID-hit 2020.
Today’s statement, issued via the London Stock Exchange, said: “On 25 June 2021, the Group announced that it expected to deliver underlying profit before tax for the full year well ahead of the Group’s historic record result.
“This performance has been underpinned by a market which has benefited from positive tailwinds since April, including unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles.
“Those tailwinds continued in July and the Group now has initial visibility on the outlook for August and September.”
Marshall’s profit upgrade follows similar positive outlooks from Lookers and Vertu Motors last week, with Inchcape also reporting near-fifteen fold profit growth in its first-half results statement.
Like its sector counterparts, Marshall conceded that a high level of uncertainty remains for the second half of 2021 and into 2022 given well documented vehicle supply issues, an expected realignment of used vehicle values.
It also highlighted the possibility of ongoing impacts of the COVID-19 pandemic.
But the group’s statement added: “Given these uncertainties, there remains a range of possible outcomes for the year, however, the Board now expects that continuing underlying profit before tax for 2021 will be not less than £40.0m.”
Marshall will announce its interim results for the six months to June 30 on August 10.