Automotive retail group, Marshall Motor Holdings (AIM:MMH), saw its shares rally around 11%, as the company enjoyed a booming recovery in trading during the third quarter – led by particularly strong activity in September.
The Society of Motor Manufacturer and Traders (SMMT) noted that total new vehicle registrations were down by 4.4% in September. In this sense, Marshall Motor Holdings ‘significantly’ outperformed the market, with like-for-like new vehicle sales up by 18.4%, and total new vehicle sales rising by 33.9%, as a result of strategic acquisitions made in 2019.
Similarly, while the SMMT reported that new vehicle retail registrations fell by 1.1% in September, the Group’s like-for-like vehicle retail sales grew by 19.1% – ahead of the market, with total new vehicle retail sales up 38.6%.
Meanwhile, the company’s fleet sales were also up by 17.1% on a like-for-like basis, with total new fleet sales up 23.9%, compared with the SMMT’s reported fleet registrations decline of 7.4%. Similarly, used vehicle sales rose by 15.7% on a like-for-like basis in September, and 29.4% in total.
Overall, total revenue was up by 28.0%, and by 16.3% on a like-for-like basis. This progress saw the company change its full-year guidance, from break-even, to an anticipated profit-before-tax of £15 million.
Marshall Motor Holdings responds
Commenting on the optimistic update, company Chief Executive, Daksh Gupta, said:
“Our strong culture, brand partnerships with scale, in-house technology platform and online presence, coupled with our exceptional colleagues have enabled the Group to significantly outperform the wider automotive retail market through this important post-lockdown trading period. Our operational performance in August and September, in particular, was strong across all key like-for-like new vehicle sales metrics and we have also delivered significant like-for-like growth in both used car sales and aftersales. On behalf of the Board, I would like to thank all of our colleagues who have worked tirelessly through these unprecedented times and contributed so magnificently in delivering this performance.”
“Whilst this period of positive trading has been welcomed following the significant impact of COVID-19 in the first half of the Year, there remain a number of uncertainties regarding the trading environment for the remainder of the Year and beyond. We are also mindful that the market in Q3 was positively impacted by pent-up demand for new and especially used vehicles, which, allied to restricted supply, created favourable conditions from which the Group was very well positioned to benefit. It is for these reasons that we have taken appropriate actions in terms of limited business closures and restructuring measures to ensure the Group is well placed to meet these potential future challenges”.
Investor notes
Following the update, the company’s shares rallied by 10.83% or 13.00p, to 133.00p apiece 13/10/20 11:00 BST. Today’s price represents the stock’s highest price since the start of lockdown, with the price last hitting this level at the start of March.
At present, the company has a p/e ratio of 5.24, and was given a 61.29% ‘Underperform’ rating by the Marketbeat community.