The over-riding feature of the Interim results from Marshall of Cambridge Holdings (MCH) was the impact of the COVID-19 related lockdown across the businesses. However, looking forward there are many grounds for optimism. The order book remains high, with a strong pipeline of opportunities available and a rapid bounce-back in the automotive retail market. Indeed, the resumption of dividend payments highlights Management’s confidence.
While the results were disappointing, the performance of the business pre-and-post-lockdown was ahead of last year and prospects remain encouraging. Typically, the gears move slowly within government machines, but the lockdown further delayed the decision-making process. Yet no projects have been cancelled, and the pipeline of opportunities remains as strong as pre-lockdown, with suggestions in some quarters that spending on defence could, in fact, improve over the medium term.
The first half proved momentous for Marshall Group Properties (MGP) as the sales & marketing suite for the Marleigh development opened during the period. Several reservations were made, with the initial residents expected to move in during late Q4. The Group’s second development, the Land North of Cherry Hinton (LNCH), received the resolution to grant planning permission, with the necessary s106 approval expected imminently.
The motor retail business, MMH, markedly outperformed its peers within the new car market, with levels of trading recovering strongly from 1 June. One benefit of lockdown was the unravelling of working capital within MMH, resulting in the Group moving to a net cash position by the period end (£25.7m, representing a £50.6m turnaround from the 2019-year end position).
We regard the NAV of 315p / share at the half-year as strongly supporting valuation. Unlocking the long-term value in the assets base continues unabated, notwithstanding modest delays due to lockdown. Our fair value / NVPO share is unchanged at 532p.
