Over the period between 2008 and 2014 the company reorganised its portfolio in order to generate the correct portfolio of brand partners.
Since 2008 as a result of 14 acquisitions and 6 start-ups, 56 franchises have been added and 25 non-core, subscale and loss making businesses have left the company . There has been geographical growth from 7 counties to 25. The business trades from 24 individual franchise marques, trading from 103 franchises across the UK.
The five year growth strategy has provided a business which has generated turnover in excess of £1bn moving from a loss in 2008 to EBIT of £15.2m full year 2014. Growth has been achieved not only through acquisitions, but also organically and with the implementation of the group’s Five Key Strategic Pillars.
Five Key Strategic Pillars
1 Class Leading Returns
As a result of strengthened operating margins in acquired dealerships, considered capital deployment and effective working capital control, the Group has delivered strong ROCE achieving 24.0 per cent. in the year ending 31 December 2014.
2 Customer First
Customer service is key to the Group’s business both as a motor retailer and a provider of vehicle leasing services. It commissions on-going independent surveys to measure customer satisfaction. The independent customer surveys conducted in 2014 in respect of Marshall Motors showed 97.2 per cent. of customers surveyed were very satisfied or completely satisfied with Marshall Motors’ service. 43.3 per cent. (in Q4 2014) of the customers surveyed in 2014 were using Marshall Motors’ services because of a good previous experience with the business or on the recommendation of a third party. This customer advocacy is key to capturing repeat car sales as well as attracting customers to dealerships to purchase additional higher margin aftersales products.
3 Retailing Excellence
The Group maintains its edge in a competitive and dynamic industry by way of innovation and creativity. This has been demonstrated through the Group’s development of Phoenix, its bespoke dealer management reporting system. Core to the Group are its sales processes by which both customer acquisition and margin retention are carefully monitored and executed. The Group also has a culture open to change and rewards its employees for their ideas used to improve the business.
4 People Centric
The Company is committed to recruiting, training and retaining talent in the industry. Since 2008, the Group has acquired or started 56 franchises (whilst also exiting a number of non-core or subscale businesses) and has grown from 41 franchises to 103. Despite significant portfolio churn and expansion in headcount, the Group has consistently improved its results in the Great Place to Work survey. The Directors believe this is due to the Company’s commitment to its people and its core values.
5 Strategic Growth
Marshall Motors believes it can grow by expanding into other English geographical locations in which it currently has no presence and focusing on brands with sufficient room for growth. The Board considers that Marshall Motors is well positioned to utilise these opportunities. It has a diversified portfolio of prestige, alternate premium and volume brands consisting of 14 core OEM partners, and scope for growth with the majority of these. Part of the net Placing proceeds, together with the Company’s revolving credit facility of £75 million, is expected to enable Motor Holdings to achieve strategic growth by participating in larger scale industry consolidation.