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RNS Number : 5390B
Marshall Motor Holdings PLC
11 January 2018
11 January 2018
MARSHALL MOTOR HOLDINGS PLC
("MMH" or the "Group")
Pre-close Statement
'2017 Performance Ahead of Previously Upgraded Expectations'
Marshall Motor Holdings plc, one of the UK's leading automotive
retail groups, issues its pre-close statement ahead of the release
on 14 March 2018 of its full year results for the year ended 31
December 2017 ("FY17").
In the second half of FY17 ("H2"), the Group continued to build
on the record financial performance reported during the first half
of FY17 ("H1") and performed well against the background of a more
challenging UK new vehicle market.
As a result, the financial performance of the Group during FY17
is expected to be ahead of our previously upgraded pre and post-tax
expectations.
Retail Segment
The SMMT has reported that the overall UK new car market in FY17
decreased by 5.7%, with retail sales declining by 6.8% and fleet
sales declining by 4.7%.
During H1, total UK new vehicle registrations to retail
customers decreased by 4.8%. In H1 the Group outperformed the UK
market reporting a marginal 0.4% decline in like-for-like* unit
sales to retail customers.
In H2, the UK new vehicle market declined further with total new
vehicle registrations to retail customers decreasing by 9.2%. The
Group maintained its outperformance of the market given its brand
portfolio, locations and people. As anticipated, during H2 the
Group also experienced some margin pressure on sales of new
vehicles to retail customers. Consistent with H1, the Group
experienced a like-for-like decline in new unit sales to fleet
customers in H2 following a commercial decision to withdraw from
some low margin business.
During H2, as the market returned to more normalised levels,
many of our brand partners reacted accordingly with a number of
positive actions. We value our brand partner relationships and will
continue to work in partnership with them in delivering our shared
objectives.
In H1, the Group reported a 5.8% increase in like-for-like used
unit sales. In H2, the Group continued to perform well, supported
by a disciplined stocking policy.
The Group's aftersales revenues remained stable with
like-for-like revenue growth in H2 broadly consistent with the 2.3%
growth reported in H1.
Discontinued Leasing Segment
On 21 September 2017 we announced the strategic disposal of the
Group's wholly-owned leasing segment, Marshall Leasing Limited
("MLL") to N.I.I.B Group Limited, a wholly owned subsidiary of Bank
of Ireland (UK) plc for a gross consideration of GBP42.5m. As
previously announced this transaction completed on 24 November
2017.
Unallocated Segment and exceptional items
Unallocated central costs in FY17 are expected to be in line
with expectations. It is anticipated that the Group will recognise
a net exceptional gain of approximately GBP37m on the disposal of
MLL, partly offset by approximately GBP6m of closure costs and
provisions in respect of certain business closures as announced on
21 November 2017.
Financial position
During FY17, management actions significantly strengthened the
Group's balance sheet. At 30 June 2017 the Group had total net debt
of GBP101.1m. Following the disposal of MLL, this has been
effectively eliminated with the Group having a small net debt
position at 31 December 2017. Together with the Group's committed
GBP120m revolving credit facility, the Group remains in a very
strong financial position and well positioned to exploit future
growth opportunities.
Outlook
The Group reported a record financial performance during H1 and
continued to build on that in H2 despite the challenging market
backdrop. The Group has a strong brand mix, attractive geographic
territories and excellent brand partner relationships as a result
of which the financial performance of the Group in FY17 is expected
to be ahead of our previously upgraded expectations.
The Board notes the latest SMMT UK new car market forecasts for
a decline of 5.4% in 2018, driven by political and economic
uncertainty. The Board therefore remains cautious about the UK car
market in 2018 as it returns to a more normalised level. During the
first quarter of 2017, the market benefitted from the impact of
one-off changes to vehicle excise duties which led to some
consumers accelerating purchase decisions to avoid higher excise
duties and this will not be repeated in the first quarter of
2018.
The strategic disposal of MLL allows the Group to focus on its
core motor retail business and is well placed to continue to
outperform the UK new car market.
Full Year Results
The Group will publish its full year results for the twelve
months ended 31 December 2017 on 14 March 2018.
Daksh Gupta, Chief Executive Officer commented:
"I am delighted to report that the financial performance of the
Group during 2017 is expected to be ahead of our previously
upgraded expectations despite the market backdrop. Following the
disposal of MLL we are now focused exclusively on our motor retail
business and our balance sheet has been further enhanced. We
therefore approach 2018 from a position of increased financial
strength and with the ongoing support of our brand partners."
* Like-for-like businesses are defined as those which traded
under the Group's ownership throughout both the entire period under
review and the corresponding comparative period.
Ends
For further information and enquiries please contact:
Marshall Motor Holdings plc c/o Hudson Sandler
Daksh Gupta, Chief Executive Tel: +44 (0) 20
Officer 7796 4133
Mark Raban, Chief Financial
Officer
Investec Bank plc (Financial Tel: +44 (0) 20
Adviser, NOMAD & Broker) 7597 5970
Christopher Baird
David Flin
David Anderson
Hudson Sandler Tel: +44 (0) 20
7796 4133
Nick Lyon
Alex Brennan
Bertie Berger
Notes to Editors
About Marshall Motor Holdings plc (www.mmhplc.com)
The Group's principal activities are the sale and repair of new
and used vehicles through Marshall Motor Group. The Group's
businesses have a total of 99 franchises covering 23 brands,
operating from 84 locations across 26 counties in England. In
addition, the Group operates five trade parts specialists, four
used car centres, five standalone body shops and one pre delivery
inspection centre.
In May 2017 the Group was recognised by the Great Place to Work
Institute, being ranked the 22nd best place to work in the UK
(large company category). This was the eighth year in succession
that the Group has achieved Great Place to Work status.
Cautionary statement
This announcement contains unaudited information based on
management accounts and forward-looking statements that are based
on current expectations or beliefs, as well as assumptions about
future events. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current
facts and undue reliance should not be placed on any such
statements because they speak only as at the date of this document
and are subject to known and unknown risks and uncertainties and
can be affected by other factors that could cause actual results,
and the Group's plans and objectives, to differ materially from
those expressed or implied in the forward-looking statements. MMH
undertakes no obligation to revise or update any forward-looking
statement contained within this announcement, regardless of whether
those statements are affected as a result of new information,
future events or otherwise, save as required by law and
regulations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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