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Daksh Gupta tells how Marshall Motor Holdings secured record results and £2.27bn revenues in 2017

Daksh Gupta, CEO of Marshall Motor Holdings
Daksh Gupta, CEO of Marshall Motor Holdings

Group has bought and sold nearly 140 businesses in a decade - and has virtually eliminated its debt.

Marshalls new-look Jaguar Land Rover dealership in Cambridge
Marshalls new-look Jaguar Land Rover dealership in Cambridge

Marshall Motor Holdings’ chief executive says the company’s record performance reflects a clear strategy and a great people culture.

Daksh Gupta told the Cambridge Independent that he was delighted with the 2017 results announced last week, which comfortably outperformed the market.

Revenues rose 19.5 per cent to £2.27billion – a dramatic rise reflecting the first full-year contribution from Ridgeway, the Newbury-based dealer group that Marshall acquired for £106.9million in May 2016.

Taking out such effects and comparing businesses owned throughout 2016 and 2017, Marshall Motor Holdings still enjoyed a rise in like-for-like revenues of 3.5 per cent.

It secured underlying profit before tax of £29.1m – up 14.4 per cent on the previous year.

Daksh said: “They are record results both at revenue and profit level. It was very pleasing.”

Marshalls new-look Volvo dealership in Cambridge
Marshalls new-look Volvo dealership in Cambridge

Used car and new car sales were both well ahead of the market.

“Our used performance was excellent,” said Daksh. “While the market was down 1.1 per cent, we were up 5.2 per cent. We also outperformed the new market – retail units were down 2.6 per cent but that compares to a market where registrations were down 6.8 per cent.”

Daksh’s decade at the helm has been marked by sustained growth in the business – from 41 franchises across six counties in 2008, none of them offering German brands – to 101 across 26 counties in 2018, plus a further 16 standalone operating units.

“It will be my 10th year next month with the company and we’ve had a very clear strategy with the business, making sure we’ve got the right brands,” he says.

“In the last decade, we’ve bought and sold close to 140 businesses. We’ve done a huge amount of portfolio management. We’ve exited 36 businesses.

“Three quarters of our portfolio now is either premium or alternate premium. If you look at the premium segment alone, in 2017 that accounted for 35 per cent of the market. It’s a segment that has doubled in a decade – and had doubled on the previous 10 years too.

Mark Raban, chief financial officer of Marshall Motor Holdings
Mark Raban, chief financial officer of Marshall Motor Holdings

“That said, we do want to maintain our balanced portfolio.

“We do very well with our volume franchises and recognise that brands go in and out of fashion – they are cyclical as the popularity of models come in and out. But if you go back a decade, only a third of our portfolio was premium or alternate premium.

“We’ve added brands like Mercedes Benz, Audi, BMW Mini, VW, Skoda. That’s not easy – you can’t just wake up one day and say we want to be a Mercedes dealer. The process is difficult, but we’ve done it.

“And we’re focused on having the right geographical footprint. We’ve stayed towards the more affluent south and eastern parts of the country.”

2017 was also a year in which Marshall reduced its debt from £199m to £2.2m, by disposing of its Marshall Leasing arm for £42.5m before costs and expenses. It also closed five sub-scale loss-making franchise dealerships and one used car centre.

“The leasing disposal has been transformational and has been one of the highlights,” says Daksh. “It has effectively eliminated our debt and given the group significant firepower to make plans for the future. We’re in a great place because of the transformation of the balance sheet.


“Our strategy is growing with our existing brand partners. We also want to extend our geographic footprint. But we will only do those acquisitions as and when it makes strategic sense.”

Chief financial officer Mark Raban adds: “We’re incredibly well-positioned to keep the growth going both organically through the existing business but also through acquisitions.

“There’s been £117m swing in our borrowings and the company has got a revolving bank facility of £120m which was undrawn last year and is fully available to put into growing the company.

“What underpins the balance sheet is our freehold property portfolio. We’ve got £116m of freehold property. At the end of 2015, that was £28m. We’ve bought in a lot of freeholds but we’ve also invested a lot ourselves – and you’ll be familiar with the investment going into Cambridge.

“It’s possible because of the strength and depth of our pockets.

“So we can look forward with confidence, notwithstanding that the market is bit more difficult. The new car market has been a bit more tricky, but it’s at times like this like when good balance sheets and tangible assets behind us really count.

Marshall Motor Holdings 2017 results

£2.27bn revenue - up 19% from 1.90bn in 2016*

3.5% - like-for-life revenue growth*

£29.1m - Underlying profit before tax, up 14.4% from £25.4m in 2016

31,801 new cars sold

21,507 fleet cars sold

44,237 used cars sold

■ Like-for-like new car sales revenue up 1%

■ Like-for-like used car sales revenue up 7%

■ Like-for-like aftersales up 2.3 %

*Revenue reflects acquisition of Ridgeway. Like-for-like figures compare those businesses trading under the group’s ownership throughout 2017 and 2016

“We are two-thirds of the way through our three-year £75m capital programme so we have £25m to spend this year.

“The site in Cambridge is very front and centre. We’ve put a first class Jaguar Land Rover facility in. It’s really good for our brand partner and for Cambridge.”

For the eighth consecutive year, the group was voted a ‘great place to work’ in the Great Place to Work Institute’s league table based on a survey that also included 1,200 former Ridgeway staff. Based on the 2016 survey, the company was ranked 22nd of the top 30 large employers and was the number one automotive employer.

“We’ve got a very strong people culture,” says Daksh. “The great thing with Marshall that goes back to Sir Arthur Marshall’s day and Sir Michael’s day is that the customer service is great.

“We are very committed to our people and that has a positive impact on service. We enjoy high levels of advocacy.”

In addition to modernising its showrooms, Marshall has also responded strongly to the changing way we purchase cars, investing in its website and focusing on social media activity.

Marshall Motor Holdings 2008 footprint
Marshall Motor Holdings 2008 footprint

“The whole buying experience of customers has materially changed in the last 20 years because of the internet,” says Daksh.

“Customers do their research online – Google and Autotrader say customers will typically spend 20 hours before they come into a dealership, so they will know roughly what they want. It’s no different to other sectors.

“We had more than six million visitors to our website last year and we’re generally recognised as number one in the industry for our social media presence.

“But buying a car is not like buying something from Amazon. It’s something you’ll live with for three years typically. You’re going to spend hundreds of hours in a car and it’s quite a personal choice.

“The British public do like their cars. They want to come in and feel, smell and test drive it.

“The Jaguar Land Rover facility in Cambridge is incredible and our reopened Volvo facility is also providing a great experience.”

Marshall Motor Holdings 2018 footprint
Marshall Motor Holdings 2018 footprint

Further changes to dealerships in Cambridge are on the way as Marshall of Cambridge works on its Wing development north of Newmarket Road.

“It’s been like a big jigsaw,” says Daksh. “What was called the ADO – the Aircraft Design Office – an old 1960s-type brown building, has been knocked down and we are assessing what’s got to go next.

“One of the things we’ve got to do is relocate the sites from The Crescent to what’s been allocated on a 10-acre strip. We’re assessing those options at the minute.”

Despite the record results, the board said it remained “cautious” about the UK car market in 2018, noting the latest forecast from the Society of Motor Manufacturers and Traders of a 5.6 per cent decline in the new car sales market.

Diesel vehicles took a particular hit last year, dropping 17 per cent last year following concerns over emission testing and a drive towards reducing air pollution.

“There’s been a lot of confusion around this topic,” notes Daksh. “If you put today’s Euro 6 diesel engine up against today’s petrol, the diesel is cleaner. Unfortunately, it’s the ones pre-Euro 6 that aren’t as clean. But everyone has tarnished all diesel engines with the same brush.”

Inside Marshalls new-look Volvo dealership in Cambridge
Inside Marshalls new-look Volvo dealership in Cambridge

London mayor Sadiq Khan has also been consulting on whether the capital’s ultra low emission zone charge, which currently covers commercial vehicles, should be extended to include older diesel cars and vans that don’t meet Euro 6 standards. Cambridge City Council’s clean air policy could in future include a pollution charge too.

“The government has got to get hold of this issue,” says Daksh. “When there’s that confusion, consumers will take the safe line and buy petrol. But that’s not necessarily great for the environment.

“Alternate fuel vehicles had their highest share last year at 4.7 per cent. It’s gaining momentum and we’re going to see that trend for many years.

“But we do still have an infrastructure issue in this country and that’s not something that’s going to get fixed in the next five to 10 years in my opinion. So I think it will be evolution rather than revolution.”

Meanwhile, expect Marshall Motor Holdings to continue its evolution – or perhaps it’s a revolution – as it sets its sights on being the UK’s number one automotive retailer.

Thanking the team and brand partners for their efforts, Daksh says: “We are up there with the very best and that’s recognised in our financial results, our public engagement scores and the quality of the business. But being number one is a goal that always moves – and you can always improve your business.”

Daksh Gupta, chief executive officer of Marshall Motor Holdings
Daksh Gupta, chief executive officer of Marshall Motor Holdings

The company has also announced that chairman Peter Johnson, who has been in post since 2015, will stand down in the summer.

“As I approach my 50th year in the automotive industry I feel the time is right to pass on the baton,” he said.

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