Marshall Motor Group has posted an impressive profit of £20.9m for 2020 despite coronavirus ravaging the economy.
Revenue fell 13.5 per cent to £1.86bn for the year with underlying profit before tax down just 5.4 per cent.
The results were well ahead of analysts’ forecasts with Zeus Capital’s Mike Allen saying the group had been ‘well navigated through testing times’.
Marshall’s outperformed the country’s falling new and used car market, but sales for both dropped during a year beset with lockdowns and difficult trading conditions for car dealers.
Chief executive Daksh Gupta – who will be chatting to Car Dealer Live later this morning – praised colleagues for their ‘outstanding’ work.
He said: ‘The unprecedented political, economic and social impact of the Covid-19 pandemic in 2020 challenged governments, businesses and individuals across the world.
‘The response of colleagues across our businesses during the year was outstanding. Despite significant uncertainty, our colleagues went above and beyond, rising to the challenges we collectively faced.
‘Their contribution to our financial result cannot be underestimated and we thank them all for their dedication and commitment.’
Gupta was pleased to report a profit for the year, but admitted there were several ‘tailwinds’ that helped the 113 outlet group.
He added: ‘Through a combination of support received from both the government and our business partners, a number of one-off sector tailwinds and our continued and significant outperformance of the wider market, we are pleased to report an underlying profit before tax for the year of £20.9m.’
Marshall Motor Group was the fifth most profitable dealer group in 2019, according to the Car Dealer Top 100 list. For that list, our experts benchmark dealers on their EBITDA profit figure.
EBITDA for 2020 for Marshall’s was £39.2m.
Marshall’s says it will not pay a dividend for 2020.
Chairman Professor Richard Parry-Jones said: ‘While the group has performed well and its financial position is strong, the board is mindful of the significant support the group has received both from government measures such as business rates relief and CJRS and from other stakeholders.
‘As a result, the board feels it would be inappropriate to recommend the payment of a final dividend for 2020.’
Parry-Jones added that the group was still operating in an ‘extremely unpredictable trading environment’.
Marshall’s says new car sales were down 19.4 per cent on a like for like basis for the year. This was compared to a fall 29.4 per cent fall across the country.
Used car sales were down 14.6 per cent like for like.
The dealer group cut its overheads by £207.1m during the year which reflected the support from the government and its partners.
Aftersales contributed nearly half (45.8 per cent) of gross profit for the year with revenue of £240.6m down like for like 13.5 per cent.
The group also revealed it has extended its revolving credit facility of £120m to 2023 but said at the end of December it had £28.8m in cash stashed away.
Mike Jones, compiler of the Car Dealer Top 100 list of most profitable dealerships and chairman of ASE Global praised the results.
He said: ‘Marshall’s full year results for 2020 represents a very strong performance given the massive effect Covid had on the industry during the year.
‘Like for like operating profit fell just 2.8 per cent, with market outperformance in new and used volumes and good control of overheads.
‘Growth in used car profit per unit and the lower turnover levels and new car gross profits shows how the business can pivot into an agency model. The strong cash reserves will see Marshall’s push for further growth.’
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