2:13 pm, June 1, 2020
Marshall Motor Group is predicting a pre-tax loss for the first six months of 2020 – but boss Daksh Gupta hopes they can turn it around in the second half of the year.
All of its sites, including 117 car showrooms, reopened today (June 1) with social distancing measures in place.
But it has said the ‘significant impact’ of closing the dealerships, combined with an expected slow return to business as usual, will mean a loss for the six months up to June 30.
It has brought back 50 per cent of staff who were furloughed in March, and boss Gupta hopes the remaining 50 per cent can join again soon as business ramps up.
In an exclusive interview with Car Dealer Magazine, he said: ‘Every company will likely make a loss for the first half the year. Up until the lockdown we were outperforming the market at a phenomenal level.
‘But the timing of the shut down could not have been worse. It’s had a big impact on March, while nothing happened in April and very little in May.
‘We hope to get back to profitability in the second half of the year, but that will all be down to demand. No one knows what level of demand will be like.’
Gupta explained that the company managed to reduce operating costs to around £10m a month during the lockdown, but still this has had a material impact. Net debt is at £3m, but the group has an overall £120m facility which it is shortly due to renew.
‘We have worked hard on our cash position and we are in a strong place,’ said Gupta. ‘The £120m will put us in a good place to take advantage of opportunities.
‘We have plenty of fire power in the tank. I have been to six dealers today and all the staff are supercharged. We have treated them well during the lockdown and they are turbocharged to get this business back up and running.’
The company furloughed some 3,900 staff – 90 per cent of its workforce – during the lockdown.
But despite this the group took orders for more than 3,700 vehicles, down from around 19,000 a year ago, since the showrooms were ordered to close on March 23 – but impressive nonetheless.
Gupta added: ‘We are grateful for the support provided by the government to both the business sector as a whole and the automotive sector in particular.
‘Initiatives such as the Coronavirus Job Retention Scheme and business rates relief have enabled us to take the right long-term decisions and to protect jobs today in this vitally important sector for the UK economy.’
Many of Marshall’s garages stayed open, running at a loss, for the emergency services.
Directors said ‘it was appropriate’ to keep those sites open ‘to support the country, particularly in light of the various Covid-19 government support schemes provided to the business’.
Gupta added: ‘We hope to get back to profit in the second half of the year.
‘We certainly can be. It could be very good but it is impossible to call right now. But one thing I will say is we will definitely be working hard to grab an unfair share of the market as Marshall always has done.’
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