Marshall Motor Holdings plc (LON:MMH) management has provided another positive trading update following on from the AGM statement in May. The market demand for new and used cars remains strong and the supply of new and high-quality used cars is constrained. In combination, the effect is to boost used car wholesale prices and margins to exceptional levels. Edison upgrade their FY21 adjusted PBT by 18% to a record £26.1m. However, supply constraints appear to be intensifying in the new car market and may persist into FY22, which is likely to face cost headwinds and reduced used car prices. As a result, the FY22 estimate remains unchanged. With the balance sheet strengthened further, the FY22e P/E multiple of 8.3x is undemanding as dividends resume in FY21.
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Marshall Motor Holdings is the 7th largest motor dealer group in the UK. Since 2008, over 160 franchise have been added and 42 non-core or loss making operations have left the portfolio. The Group operates over 117 franchise dealerships representing different brand partners in 28 different counties across England. Their strategy is for continuing growth in their retail business organically and through acquisitions.
