Marshall Motor Holdings - Strong used car market drives record results

Marshall Motor Holdings’ (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. We upgrade our 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, our 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.