Marshall Motor ups profit outlook despite second lockdown impact
Car dealership Marshall Motor has hiked its profit outlook for the second time in as many months as surging demand for new cars offset the impact of the second lockdown.
The group said it now expects 2020 underlying pre-tax profits of no less than £19 million, up from the £15 million it guided for in October, helping shares lift 3%.
The firm had originally only expected to break even this year.
It said it does not expect to tap into the Government’s furlough support scheme for workers next year as it revealed the better-than-expected performance.
Marshall said trading was knocked by the closure of its showrooms during the one-month lockdown, but it still outperformed the new car market by 9.8% on a like-for-like basis across October and November.
It was also able to operate its aftersales business during the lockdown, take orders remotely and deliver vehicles through its click and collect service.
But like-for-like sales of used cars fell 12.7% in October and November combined, while after-sales revenues dropped 3.8%.
Marshall added: “Since the reopening of its showrooms on December 2, the group has continued to trade well and as result, the group is now anticipating underlying profit before tax for the year of not less than £19 million.”
However, the firm added a note of caution over the outlook for next year, given the uncertainty over the path of the pandemic and the Brexit year-end deadline looming.
It said the group has “benefited from a number of well-documented sector tailwinds in 2020 and therefore remains cautious over the trading environment for 2021”.
Marshall’s performance comes against the backdrop of a difficult car market, with figures from the Society of Motor Manufacturers and Traders (SMMT) showing demand for new cars fell by 27.4% last month.
The SMMT said just 113,781 new registrations were recorded in the UK last month, nearly 43,000 fewer than during November 2019, as showrooms were forced to close.
Trade has not been this poor since the 2008 recession.