Marshall Motor Holdings - Robust performance as challenges persist
In contrast to some of its immediate peers, Marshall Motor Holdings (MMH) continues to deliver robust performances in even more challenging UK car markets. Increased revenues and gross profit, with gross margins maintained at 11.4%, limited the fall in H119 PBT to just £0.8m or 5% compared to H118, allowing for the restatement for adoption of IFRS 16. We maintain our underlying PBT estimates for FY19, which are reduced by the non-cash impact from the implementation to IFRS 16 by around 3.6%. We feel recent price weakness was due to company-specific issues at peers. While MMH may be facing a plateau in profitability as UK car markets await clearer economic signals, we feel the yield is supportive while investors await any improvement in fundamentals for the automotive retail sector overall.Marshall Motor Holdings PLC is a holding company. Co. is an automotive retail group. The principal activity of Co.'s subsidiary undertakings is the sale and servicing of passenger cars and commercial vehicle and associated activities. Co. is organised into one business segment being the retail segment. The retail segment includes sales of new and used vehicles, together with the associated ancillary aftersales services of; servicing, body shop repairs and parts sales.
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