The promising numbers are thanks to the Group's increase in used car sales and the acquisition of a garage in Newbury.
Companies: Marshall Motor Holdings Plc
Marshall Motor Group (LON: MMH) has seen shares jump 8% in early trading today off the back of its H1 17 numbers.
The group saw profit before tax up 33% to £18.6m off the back of a 44% increase in revenue as used car unit sales grew 39.7% (like-for-like up 5.8%). Aftersales revenue also contributed, up 43.1% thanks to strong service performance. An interim dividend of 215p per share was issued, up from 180p in H2 16.
The strategic acquisition of Ridgeway Garages in Newbury, Berkshire also aided in the results, contributing profit before tax of £5.4m in H1 17, up from £1m in H1 16.
New car retail unit sales were up 32.7% (like-for-like down 0.4%), outperforming the UK new car retail market which was down 4.8%, confirming that the business has experienced ongoing pressure on margins.
Group CEO Daksh Gupta had this to say regarding the results:
"The Board is pleased to announce another period of record trading, underpinned by like-for-like growth together with the contribution from Ridgeway which the Group acquired on 25 May 2016. In the two years since listing, the Group has successfully completed a number of retail acquisitions transforming its scale, geographic footprint and franchise portfolio as well as significantly growing its profitability."
And while Gupta also acknowledged the pressure that the industry has been under during 2017, he credited a good spread of franchise locations, as well as a balance of volume and prestige sales for Marshalls continued growth.
Looking forward, consensus forecasts are baking in a doubling of both revenue and net profit in the 3 years to 2017. The company is currently trading at a low PE ratio of 5x compared to an industry median of 14x, which may be due to the Group's small operating margin of just 1.5%, as well as perceived concerns about the general market environment.