Marshall Motor Holdings

LN: MMH

£128.5m market cap

165p last close

Marshall Motor is the seventh largest UK motor retailer, operating 100 franchises spread across 23 brands at 83 locations. It is one of six UK dealership groups that represent each of the top five volume and premium brands. It has a strong presence in eastern and southern England.

Investment summary

MMH has established a strong track record as it has transformed and grown to rank seventh among UK automotive retailing groups. The strong brand coverage, excellent relationships with major manufacturers and a healthy balance sheet should continue to support strategic development, with a new chairman and CFO also in place. Despite a volatile Q318 for UK new car registrations, management raised its outlook for FY18 due to strong used car performance. FY19 remains challenging with modest market declines likely and cost pressures persisting.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 1899.4 38.4 25.4 26.2 6.3 1.3
2017A 2268.9 46.4 29.1 30.8 5.4 2.1
2018E 2207.8 41.6 25.7 26.3 6.3 3.4
2019E 2267.3 41.1 24.8 25.4 6.5 3.5
Last updated on 19/02/2019
Industry outlook

Market dynamics favour larger motor dealership groups against smaller independent groups, which still command c 60% of the franchise market. Global manufacturing overcapacity still points to OEM support, although market and buyer confidence is undermined by Brexit concerns, negative sentiment on diesel and PCP finance and potential H218 new car supply disruption rates. The large rating discount to the FTSE All-Share General Retailers Index fails to recognise defensive qualities across a sector where used vehicle and aftersales activities account for the majority of profits.

Last updated on 19/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 3.5
Forecast gearing ratio (%) 2
Price performance
%
1m
3m
12m
Actual 6.5 5.8 9.3
Relative* 3.1 2.9 10.9
52-week high/low 175.5p/122.5p
*% relative to local index
Key management
Daksh Gupta CEO
Mark Raban CFO
Mark Leeder Head of Commercial Finance

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