Marshall Motor is the seventh largest UK motor retailer, operating 108 franchises spread across 23 brands at 108 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.
MMH has established a strong track record as it has transformed and grown to rank seventh among UK automotive retailing groups. Strong brand coverage, excellent relationships with major manufacturers and a strong balance sheet continue to support strategic development. FY19 remains challenging not least due to Brexit uncertainty. Modest market declines were confirmed by the H119 results, with robust returns and the outlook maintained. Management displays confidence with ongoing investment in new franchises, and 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.