Marshall Motor FY profit seen 'significantly ahead' of market views
Updated : 09:13
Automotive retail group Marshall Motor said on Friday that full-year profit it set to be "significantly ahead" of current market expectations as it continues to benefit from positive tailwinds, and that it plans to resume the payment of dividends.
In an unscheduled trading update, the group highlighted a recent unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles. It also said it has continued its strong outperformance of the wider new and used vehicle markets.
As a result, Marshall now expects to report an "exceptionally strong" first-half performance in terms of both profit and cash generation.
"There remains a high level of uncertainty over the second half of 2021, and possibly longer, given the potentially significant impacts of new vehicle supply issues as a result of a well-documented worldwide shortage of semi-conductors, a realignment of used vehicle values and the continuing impact of the Covid-19 pandemic," the company said.
"To date, supply issues have had limited impact on the group's sales volumes, however supply in both new and used vehicles has tightened and there are signs that these issues will become more acute in the second half of the year and maybe beyond."
Marshall said there is a wide range of possible outcomes for its full-year results but it now expects continuing underlying pre-tax profit for 2021 to be significantly ahead of market views, even after the repayment of £4m in government support. It will also be "well ahead" of the group's historic record result.
In addition, the company plans to resume the payment of dividends "as soon as possible" and said it will consider the position next at its interim results in August.
At 0910 BST, the shares were down 3.1% at 185p.
Russ Mould, investment director at AJ Bell, said: "Used car prices are shooting up and demand remains very strong. The key question is whether this is a short-term boost as individuals seek alternative ways to travel to work than use public transport, or whether the car retail sector is going through a long-term structural change."