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With Marshall Motor Holdings formerly floating today on the London Stock Exchange, the first dealer group to do so since Cambria Automobiles in 2006, Motor Trader was the first publication to talk to CEO Daksh Gupta about what prompted the move and what his plans are for the group.
Gupta sees the flotation as giving the group the funding it needs to achieve its further growth plans, fund redevelopments and expand its e-commerce operations.
“What this IPO is all about is giving us the access to the capital to re-invest in growing the company. We have zero debt and have access to over £100m of firepower. We have a number of investments to make in site redevelopments and clearly have acquisition opportunities which we are assessing. But we will only expand with our existing brand partners,” he said.
The flotation valued the group, rated 10 in the Motor Trader Top 200, at £115.1m with shares trading from 149p. The Marshall family, who has owned the aerospace and defence to car retailing Marshall Group for over 100 years, stays on as the majority shareholder with 65.2% of the shares. The expanded board of directors collectively holds a 1.3% stake, a move which saw Gupta put £1m of his own money into the business according to the Placing and Admission to AIM document outlining the floatation plan.
Gupta has led the Marshall group since 2008, having joined from Ridgeway prior to which he had gained valuable plc experience at both Accident Exchange and Inchcape. When he joined the business was a small regional group operating across just six counties clustered around East Anglia. The expanded group now runs 71 franchises covering 24 brands across 16 counties across England. With a balanced portfolio of volume and prestige marques, it claims is has the highest brand coverage of any dealer group in the UK.
According to Gupta the opportunity to float the motor group was first discussed 12 months ago and was prompted by its parent’s plan to expand across its other businesses including the 174 acre 1,200 house Wing property development in Cambridge. Capital was also needed for its aerospace activities as the operator of Cambridge Airport. Floating the motor division, while retaining a majority stake, provided a mutually beneficial solution.
“As a privately owned company there is only so much you can do and with the Marshall family seeing the motor group position itself to where it is now, it wanted to support our plans to continue to grow the business. The IPO was essentially a way of us having access to the capital markets to do exactly that. Through the IPO we have raised £40m in cash in addition we have put that alongside a revolving credit facility of £75m, which we have negotiated with our banks, which gives us a headroom of north of £100m to be able to invest in and grow the business.”
Gupta is pleased to have the Marshall family on board as the majority shareholder and says the values that have driven the group will be retained now it is an independent company with its own board and industry stalwart Peter Johnson as its chairman. Johnson is a former CEO of both Marshall and Inchcape.
According to Gupta his manufacturer partners were involved at an early stage and all support the decision to float. Keeping close to his OEMs is critical for Gupta as he reconfirmed the group will now only expand with its existing partners.
“Through this process we consulted with every chief executive of our brand partners and every single one of them was supportive. We respect our manufacturer relationship and their support has been absolutely tremendous.”
So how big can the business now grow?
“We have significantly reorganised the portfolio in the last six years and are in a unique position such that we are the only group in the UK to represent all top 10 volume and top five prestige brands. This gives us a unique market representation with the highest brand coverage of 88%.
“We’ve got the right partners and don’t want any more. Our strategy now is to build scale with those brands. How big can the group grow? There’s no target number and we will continue to do it in a measured way in line with our strategy.”
Having transformed the group over the last seven years, Gupta has every intention of staying on to lead this newly floated operation.
“I’ve got no intention of going anywhere. I’m very committed to the business and hope to stay here for many years to come.”