Last close As at 05/08/2026
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Market capitalisation
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Research: Industrials
Marshall Motor Holdings (MMH) has issued a pre-close trading statement indicating that performance was in line with management expectations even though markets remain challenging. It also comes at a time when peers have been suffering from what increasingly appear to be company-specific issues. With new and used-car demand continuing to decline in the face of Brexit-induced confidence issues, MMH again outperformed. However, margin pressures and further potential H2 supply-side constraints are expected to lead to a modest fall in profitability. Our estimates remain unchanged and MMH is trading on a current-year multiple of just 5.9x supported by a healthy dividend yield. Any recovery in markets post the Brexit outcome is not reflected by the multiple contraction, even if much of the downside now appears discounted.
Written by
Marshall Motor Holdings |
Still performing robustly with strong cash flow |
Pre-close trading update |
Automotive retail |
11 July 2019 |
Share price performance
Business description
Analyst
Marshall Motor Holdings is a research client of Edison Investment Research Limited |
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Marshall Motor Holdings (MMH) has issued a pre-close trading statement indicating that performance was in line with management expectations even though markets remain challenging. It also comes at a time when peers have been suffering from what increasingly appear to be company-specific issues. With new and used-car demand continuing to decline in the face of Brexit-induced confidence issues, MMH again outperformed. However, margin pressures and further potential H2 supply-side constraints are expected to lead to a modest fall in profitability. Our estimates remain unchanged and MMH is trading on a current-year multiple of just 5.9x supported by a healthy dividend yield. Any recovery in markets post the Brexit outcome is not reflected by the multiple contraction, even if much of the downside now appears discounted.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17** |
2,232.0 |
25.4 |
26.9 |
6.40 |
5.4 |
4.4 |
12/18 |
2,186.9 |
25.7 |
27.4 |
8.54 |
5.6 |
5.9 |
12/19e |
2,201.9 |
24.1 |
24.6 |
8.54 |
5.9 |
5.9 |
12/20e |
2,257.4 |
24.3 |
24.9 |
8.54 |
5.8 |
5.9 |
*PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items. **Restated following the disposal of Leasing in FY17.
With new car sales down 3.4% in H119, MMH unit volumes outperformed the declines in both the retail (-3.2%) and fleet (-3.6%) market segments. It achieved strong growth in used-vehicle unit sales, although margin pressures grew as Q219 progressed. The higher-margin aftersales revenue also grew. Cost inflation headwinds continue and overall profits are in line with management expectations, despite the volume outperformance. MMH retains a strong financial position to pursue opportunities as they arise, as evidenced by the acquisition of six ŠKODA dealerships in H119 for £3.5m. MMH subsequently acquired the freehold to the Northampton dealership for a further £1.7m. As previously advised £6m was paid to eliminate all outstanding defined benefit pension liabilities, as was the increased final FY18 dividend. Despite the spending, MMH expects H119 net cash of c £5m (FY18 net debt £5.1m). H219 remains challenged by cost pressures, Brexit and more changes to emission testing procedures from 1 September. Further detail will be provided when the company reports half-year results on 13 August.
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Research: Investment Companies
European Assets Trust (EAT) aims to achieve capital growth over the long term through investing in small- and medium-sized companies listed in Europe (ex-UK). Over the past 10 years to end-June 2019, the trust has delivered an annualised NAV total return of 15.1%. EAT also has an attractive 5.6% dividend yield, significantly higher than its peers, reflecting the board’s high distribution policy. The trust completed its legal migration to the UK from the Netherlands in March 2019; previously dual-listed in London and Amsterdam, EAT is now solely traded on the London Stock Exchange (LSE) and is a constituent of the FTSE SmallCap and FTSE All-Share indices.