In its half-year results for the six months to 30 June 2021, Marshall Motor Holdings (MMH ) reported record first half revenue and margin driven by ‘unprecedented market conditions’, thereby prompting the Company to declare a 1H21 interim dividend of 8.86p per share.
The Group, which operates as one of the UK's leading automotive retailers, said reported revenue increased by 49% to a record £1,334 bn compared to £895.3m recorded in 1H20. In addition, the Group also swung to a pre-tax profit of £39.5m from a loss of £10.7m in 1H20.
Last week, the AIM-listed automotive retailer significantly raised its full-year expectations for the third time this year following favourable conditions which had continued into July.
Marshall’s adjusted net cash position at 30 June 2021 was £57.2m vs an adjusted net cash position of £27.4m at 30 June 2020 and adjusted net cash of £28.8m at 31 December 2020.
Addressing shareholders, Marshall Motor attributed the record results to ‘unprecedented market conditions, a strong market outperformance as well as robust operational controls.’
In relation to FY21, the Board said it expects that the Group's profitability will be ‘heavily biased’ towards the first half due to the unprecedented trading conditions in the Period. As a result, for the current year the Board is varying the application of its usual dividend policy.
Shares in Marshall Motor Holdings have increased by over 70% in value since the beginning of 2021. The stock was trading 0.82% higher this morning at 246p following the news.
For 2021, dividend cover will remain between 2.5 to 3.5x underlying earnings but will be paid in an around two-thirds (interim dividend) and one-third (final dividend) split, it explained.
The Board highlighted to investors that it will decide the level of the Company’s FY21 final dividend when the Group's 2021 full year results are announced later in March 2022.
CEO, Daksh Gupta, said, "The Group's record performance in the first half of the year was exceptional. Whilst we acknowledge that this has been largely driven by unprecedented market conditions, particularly the used car market, we are proud of the contribution of our operational teams across the country for another period of strong market outperformance.”
The company said a high level of uncertainty over 2H21 and into 2022 remained as a result of "well documented vehicle supply issues, an expected realignment of used vehicle values--the timing of which is uncertain--and the continuing impact of the COVID-19 pandemic."
As a result of this, together with a strong performance in 2H20 driven by the release of pent up demand following the first national lockdown in 1H20, the Company told investors that it anticipates ‘downward pressure’ on the business’ like-for-like performance in 2H21.
While the Group said there remains a range of possible outcomes for the year, the Board expects that continuing underlying profit before tax for 2021 will be not less than £40.0m.
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