LONDON (ShareCast) - (Sharecast News) - Shares in Marshall Motor Holdings powered ahead on Wednesday after the car dealership upgraded its full-year profit guidance.
The retailer now expects underlying pre-tax profits for the year to 31 December to be not less than £19m, up on an earlier forecast for £15m.

Marshall, which owns 113 franchises covering 22 brands, said a strong September, a key month for car retailers because of changes to number plates, had continued into October.

The car industry was hit hard by lockdown measures earlier this year, but since then pent-up demand has seen sales rocket. Marshall reported a rise in new retail unit sales on a like-for-like basis in October, noting that it had "significantly outperformed" SMMT-reported new retail market registrations.

Used care unit volumes also performed strongly on a like-for-like basis, Marshall added.

Trading was impacted by the second national lockdown, however, which closed non-essential businesses in November. On a combined basis, Marshall outperformed the new retail car market by 9.8% in October and November, but used car sales were down 12.7%.

As at 1345 GMT, shares in the AIM-listed firm were ahead 5% at 140.0p.

The chain did sound a note of caution going forward, however: "There continues to remain significant social and economic uncertainties as a result of both Covid-19 and the potential impact of the UK's departure from the European Union on 31 December.

"The group has benefited from a number of well-documented sector tailwinds in 2020, and therefore mains cautious over the trading environment in 2021."

Andy Chambers, analyst at Edison, said: "Trading in the fourth quarter has proven to be more resilient than management expected, despite the national lockdown during November.

"We have increased our estimates to reflect the uplift and now expect an improved cash performance as inventory management remains robust. Challenges remain for 2021, not least Brexit and Covid-19, and we assume a relatively flat year overall with less marked disruption in the first half of 2021."

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