Marshall Motor is the seventh largest UK motor retailer, operating 101 franchises spread across 22 brands at 89 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.
Marshall Motor Holdings (MMH) remains one of the most progressive automotive retail groups in the UK. It has the management experience and financial strength to continue its strategy to drive organic performance by outperforming UK car markets, augmented by appropriate value-creating acquisitions. Market challenges over the last few years have been numerous and persistent, but MMH has delivered a robust performance during the period, including in H119. The share price has recovered modestly since the H119 announcement, but MMH’s rating does not reflect its robust performance, with the support of a healthy dividend yield.
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 and negative sentiment on diesel with ongoing new car supply disruption due to the new WLTP emissions testing regime. 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.