Marshall Motor Holdings - Large-scale strategic expansion

Marshall Motor Holdings (MMH) has announced a significant further strategic expansion through the acquisition of privately owned Motorline Holdings for a cash consideration of £64.5m. Adding another top 20 UK dealership group with 48 franchises strengthens brand and geographic coverage and adds approaching £700m of revenues, further increasing MMH’s top tier credentials. The deal should be EPS enhancing and value creating in FY22 despite the current market challenges, underlining why the current FY22e P/E rating appears undemanding. With a resumption of growth in normalised markets anticipated in FY23, MMH retains a strong financial position even after the deal to continue investing for growth.