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Marshall Motor Hldgs (MMH)

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Wednesday 18 December, 2019

Marshall Motor Hldgs

Strategic acquisition and trading update

RNS Number : 2407X
Marshall Motor Holdings PLC
18 December 2019


("MMH" or the "Group")


Strategic Acquisition of Eight Volkswagen Group UK Franchises

2019 Trading Update

Marshall Motor Holdings plc, one of the UK's leading automotive retail groups, announces the acquisition ("Acquisition") of the business and assets of a portfolio of Volkswagen and ŠKODA passenger and commercial vehicle franchises (the "Businesses") from Jardine Motor Group UK Limited ("JMG") for up to £22.3m cash including £13.0m of inventory. The Group also provides a brief trading update on 2019.

Overview of Acquisition

The Businesses comprise six Volkswagen passenger car franchises in Aylesbury, Harlow, Letchworth, Loughton, Milton Keynes and St Albans together with a Volkswagen commercial vehicle franchise and bodyshop in Loughton and a ŠKODA passenger car franchise in Milton Keynes.

Each of the acquired businesses operates from properties that are fully compliant with the latest brand requirements. In aggregate, approximately 400 employees will transfer to the Group as part of the Acquisition.

JMG also operates a Volkswagen authorised repairer and Approved Used car operation in Towcester which is excluded from the transaction. JMG will be relinquishing this franchise as part of the Acquisition.

The Volkswagen franchise in Aylesbury shares a site with an Audi Approved Used business which is being retained by JMG.  Completion of Aylesbury Volkswagen will be deferred pending completion of the legal process to sub-divide the site.  It is expected that this process and the transfer of the Aylesbury Volkswagen business will be completed in 2020.

Aggregate revenue for these Businesses was £196.1m in the year ended 31 December 2017 and £212.8m for the year ended 31 December 2018 with a loss before tax in these years of £3.3m and £2.8m respectively.  As a result, the Acquisition is expected to be earnings dilutive in 2020 and 2021 whilst the Group improves the operational performance of the Businesses. We expect the deal to be earnings enhancing from 2022 onwards.

The total consideration agreed for the fixed assets and goodwill of the Businesses will be up to £9.3m, including deferred consideration in respect of the Aylesbury business, funded from the Group's existing resources. The fixed assets include £4.3m in respect of freehold/long leasehold properties in Letchworth and St Albans and the goodwill is £3.6m. In addition, excluding Aylesbury, the Businesses held £13.0m of inventory of motor vehicles, parts and other stock at completion which will be primarily funded via the Group's existing stock funding facilities. 

Strategic Rationale for the Acquisition

The Volkswagen Group is one of the world's leading automobile manufacturers and the largest carmaker in Europe.  MMH partners with all of the Volkswagen Group's core brands: Volkswagen Passenger Cars, Audi, SEAT, ŠKODA and Volkswagen Commercial Vehicles. Year to date Volkswagen Group's core passenger car brands accounted for 20.6% of all new vehicles sold in the UK and 11.5% for commercial vehicles. Volkswagen Group is investing €60bn in e-mobility, hybridisation and digitisation between 2020 and 2024, with the much anticipated Volkswagen ID.3 model scheduled for release in the UK in 2020.

MMH first partnered with Volkswagen in 2012 and has significantly strengthened this partnership over the last seven years.  The Acquisition, completed with the full support of Volkswagen Group UK, is in line with the Group's strategy to become the UK's premier automotive group through growth with existing brand partners in new geographic territories in the UK.  Given the changing motor retail landscape, that establishing further scale with our brand partners is of paramount importance.

Following this acquisition, the Group now represents the Volkswagen Group in 53 operations across the UK making the Group Volkswagen Group UK's largest partner by number of locations. The Group is now the second largest partner in the UK for Volkswagen passenger cars with 14 retail centres[1]. The Group is also now the largest partner in the UK for Volkswagen commercial vehicles with six retail centres[2].  The acquisition of Milton Keynes ŠKODA, which follows the acquisition of six ŠKODA franchises earlier this year, further cements the Group's position as the largest ŠKODA retailer in the UK with 12 retail centres[3].

The acquired Businesses are located in excellent locations that are contiguous with the Group's existing Volkswagen and ŠKODA businesses. They have excellent potential for growth and improvement in operating performance as part of the Group's scaled and focused Volkswagen and ŠKODA divisions. 

Alex Smith, Managing Director of Volkswagen Group UK, said:

"We are pleased to have extended our relationship with Marshall, a trusted partner of Volkswagen Group here in the UK, demonstrated by the fact that it is now our largest partner in the UK by number of locations.  Marshall has demonstrated its commercial and customer focus capabilities over the long term and we are confident in its ability to maximise the operating performances of these businesses.

The Volkswagen Group is investing significantly in its future product portfolio and having strong retail partners such as Marshall is key to delivering these exciting new products to our customers."

Other Portfolio Developments during 2019

In addition to the Acquisition, the Group has continued to expand and develop its portfolio during 2019. 

As announced on 4 March 2019, the Group acquired six ŠKODA franchises through two acquisitions, making it the largest ŠKODA retailer in the UK.  We are pleased with the integration and performance of these businesses.

In September 2019, the Group acquired two Honda businesses in Reading and Newbury from JMG, reinforcing the Group's position as the second largest Honda partner in the UK.  The acquisitions were completed with the full support of Honda UK and the Group now represents the Honda brand in eight excellent locations in the UK[4].

In 2019, the Group was awarded an open point for Volkswagen Commercial Vehicles in Lincoln.  The new business, which opened in October 2019, occupies one of the Group's existing sites made vacant following the relocation of the Group's Jaguar and Land Rover businesses to a new 'Dual Arch' site in Lincoln earlier in the year.

It is anticipated that the Honda acquisitions and Lincoln Volkswagen Commercial Vehicles will contribute revenue of c£30m in 2020 and will be marginally earnings dilutive in 2020.  It will be earnings enhancing thereafter.

As the largest Volvo dealership Group in the UK[5], we have commenced a new partnership with LEVC, the manufacturer of electric London taxis owned by Geely Automotive Holdings.  The Group represents the LEVC brand in Nottingham, sharing facilities with the Group's Volvo franchise.

In addition, the Group is in advanced negotiations to acquire the Volvo franchise in Derby. This is expected to complete before the end of the year.

Daksh Gupta, Chief Executive of MMH, said:

"I am delighted that we have further strengthened our already excellent relationship with Volkswagen Group UK with this acquisition.  While the acquired businesses are currently loss making, we are confident in their future potential.  The businesses are in excellent locations that are contiguous to our existing Volkswagen and ŠKODA franchises and each site is fully compliant with the latest brand requirements

It is an exciting time to extend our partnership with Volkswagen Group UK as the impact of its significant investment in electrification and mobility services will be demonstrated.  We are extremely proud to represent Volkswagen Group and wish to thank the UK management teams of each brand for their support for this acquisition.

I am also delighted that we have been able to extend our partnership with both the Honda and Volvo brands, each of which we have long established and scaled relationships with. I am also pleased to establish a new relationship with LEVC.

Finally, I would like to extend a warm welcome to all colleagues of our recently acquired businesses to Marshall and look forward to working with them over the coming years."


Trading Update

As has been well documented and previously reported, trading conditions for the UK automotive retail market have been challenging in 2019, impacted by continued weak consumer confidence as a result of political uncertainty over Brexit together with ongoing cost headwinds and vehicle supply constraints due to the implementation of further emissions-related regulations in September 2019.  The Society of Motor Manufacturers and Traders' ('SMMT') currently forecasts the UK new car market to decline 2.8% in 2019 and a decline of 4.4% in 2020 with the next forecast due to be issued in January 2020.

The Group has performed well in this challenging market and despite trading conditions weakening further in Q4 2019, the Board's outlook for the full year remains unchanged.

The Board will provide an update on the trading environment on 10 March 2020 when it announces its results for the year ending 31 December 2019.






[1] Volkswagen Passenger Car Locations: Aylesbury, Barnstaple, Grimsby, Harlow, Letchworth, Loughton, Milton Keynes, Newbury, North Oxford, Reading, Scunthorpe, South Oxford, St Albans and Taunton.

[2] Volkswagen Commercial Vehicles Locations: Bridgwater, Lincoln, Loughton, Reading, Scunthorpe and South Oxford.

[3] ŠKODA Locations: Barnstaple, Bedford, Croydon, Harlow, Leicester, Letchworth, Milton Keynes, Newbury, Northampton, Nottingham, Oxford and Reading.

[4] Honda Locations: Harrogate, Hull, South Leicester, Newbury, Peterborough, Reading, Scarborough and York.

[5] Volvo Locations: Bishop's Stortford, Cambridge, Grantham, Leeds, Milton Keynes, Nottingham, Peterborough and Welwyn Garden City.



For further information and enquiries please contact:


Marshall Motor Holdings plc

c/o Hudson Sandler Tel: +44 (0) 20 7796 4133

Daksh Gupta, Chief Executive Officer

Richard Blumberger, Chief Financial Officer




Investec Bank plc (NOMAD & Broker)

Tel: +44 (0) 20 7597 5970

Christopher Baird


David Flin


David Anderson




Hudson Sandler

Tel: +44 (0) 20 7796 4133

Nick Lyon

Bertie Berger

Nick Moore




Notes to Editors 

About Marshall Motor Holdings plc (

The Group's principal activities are the sale and repair of new and used vehicles. The Group's businesses comprise a total of 119 franchises covering 24 brands, operating from 96 locations across 28 counties in England. In addition, the Group operates six trade parts specialists, two used car centres, six standalone body shops and one pre delivery inspection centre.

In May 2019 the Group was recognised by the Great Place to Work Institute, being ranked the 11th best place to work in the UK (super large company category). This was the ninth year in succession that the Group has achieved Great Place to Work status.

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