As previously announced, the Marshalls Motor Holdings Board understands the importance of dividends to shareholders and in light of the strong financial performance and cash generation in the Period, is to announce the restoration of dividends.
Since IPO, the Board has implemented a progressive dividend policy whereby dividends are paid in an approximate one-third (interim dividend) and two-thirds (final dividend) split. Dividends have been disrupted by the impact of the COVID-19 pandemic on the business, however, the Board intends to reinstate and reset this policy from FY 2022 onwards.
In relation to FY 2021, the Board expects that the Group's profitability will be heavily biased towards the first half due to the unprecedented trading conditions in the Period. As a result, for the current year the Board is varying the application of its usual dividend policy. For 2021, dividend cover will remain between 2.5 to 3.5 times underlying earnings but will be paid in an approximate two-thirds (interim dividend) and one-third (final dividend) split.
The Board is therefore to announce an interim dividend of 8.86p per share (2020 interim dividend: 0p) which will be paid by 17 September 2021 to shareholders who are on the Company's register at close of business on 20 August 2021.
Other financial lights include:
The Board will decide the level of the FY 2021 final dividend when the Group's 2021 full year results are announced in March 2022.
· Record first half revenue and margin driven by unprecedented market conditions, their strong market outperformance and robust operational controls;
· Record underlying profit before tax of £38.4m (H1 2020: underlying loss before tax of £(11.8m); H1 2019: underlying profit before tax of £15.2m);
· Strong cash generation with adjusted net cash at 30 June 2021 of £57.2m (30 June 2020: £27.4m) after £17.2m of freehold and acquisition expenditure; commitment to repay £4.0m of 2021 Government support;
· Balance sheet strengthened further; net assets at 30 June 2021 of £239.3m (30 June 2020: £190.5m) equivalent to 305.9p per share; underpinned by freehold/long leasehold property of £139.6m;
· Restoration of dividends; H1 interim dividend of 8.86p per share.
· Continuing underlying profit before tax for the full financial year expected to be not less than £40.0m.