-- New and attractive geographical territories: Motorline operates in attractive territories, a number of which are new territories for the Group, including in Kent, West Sussex, Bristol, South Wales and the West Midlands. The Group now operates in 37 counties in England and Wales covering a significant proportion of the population and providing a strong platform for future used car growth.

-- Manufacturer support : the Acquisition is fully supported by all relevant manufacturers, both those whom the Group currently represents and those it does not, including in particular, Toyota, Lexus and Hyundai.

The table below shows the current and resultant number of sites for the Group following the Acquisition:

 Franchised Dealerships 
 Brand                       MMH   Motorline   Enlarged 
                                                 group 
 Audi                         9        3          12 
 BMW                          4        -          4 
 Ford                         2        -          2 
 Ford Commercial              2        -          2 
 Honda                        7        -          7 
 Hyundai                      -        7          7 
 Jaguar                       7        -          7 
 Kia                          2        -          2 
 Land Rover                   9        -          9 
 LEVC                         1        -          1 
 Lexus                        -        5          5 
 Maserati                     -        1          1 
 Mercedes-Benz                9        -          9 
 Mercedes-Benz Commercial     4        -          4 
 MINI                         4        -          4 
 Nissan                       3        7          10 
 Peugeot                      3        4          7 
 SEAT                         4        -          4 
 KODA                        12        3          15 
 smart                        2        -          2 
 Toyota                       -       13          13 
 Toyota Commercial            -        1          1 
 Vauxhall                     2        -          2 
 Volkswagen                  15        4          19 
 Volkswagen Commercial        6        -          6 
 Volvo                        9        -          9 
 Total                       116      48         164 
--------------------------  ----  ----------  --------- 
 Other Standalone Operations 
 TPS                          6        4          10 
 Used car centres             2        5          7 
 Body shops                   6        -          6 
 PDI centre                   1        -          1 
 Total                       131      57         188 
--------------------------  ----  ----------  --------- 

Following the Acquisition, the Group now operates a total of 164 franchises covering 27 brands, across 37 counties in England and Wales. In addition, the Group operates 10 trade parts specialists, seven used car centres, six standalone body shops and one pre delivery inspection centre.

The Group does not expect to make any material changes to its portfolio as a result of the Acquisition but will continue to review its portfolio on an ongoing basis to ensure appropriate representation and maximisation of opportunities. The Group's strategy is to continue to grow scale with selected brand partners. However, it will only do so where it makes strategic and financial sense for its shareholders whilst maintaining its strong balance sheet.

Acquisition Terms

The Group has acquired the entire issued share capital of Motorline from Glen Obee, Thomas Obee, Sarah Obee and Anne Obee (Sellers) for a cash consideration of GBP64.5m, funded from the Group's existing cash resources. In addition, the Group has acquired the freehold property occupied by Motorline's Canterbury KODA dealership for GBP2.9m from GGT Estates Limited (GGTE), a property company controlled by the Sellers.

The Group has also been granted options (Property Options) to acquire from GGTE the strategic freeholds of the Tunbridge Wells Audi dealership for GBP12.1m and the newly constructed Bristol Toyota/Lexus dealership for GBP12.8m. The Property Options may be exercised by the Group within 6 months and 18 months respectively of the Acquisition and it is currently expected that the Group will exercise these options in due course. Pending exercise of the Property Options, these properties will be occupied under lease from GGTE.

Finally, 14 other properties occupied by Motorline are leased from GGTE. New leases have been negotiated and put in place between Motorline and GGTE on arm's length commercial terms.

A retention amount of GBP1.3m will be held for a period of one year from completion of the Acquisition from which the Group may set off any successful warranty and/or indemnity claims it has against the Sellers.

Financing

The Acquisition has been funded from the Group's existing cash resources following strong cash generation over the past 18 months.

At completion, the Group assumed c.GBP10m of Motorline debt and acquired c.GBP20m of Motorline cash. The Group remains in an adjusted net cash* position post-Acquisition (pre-exercise of the Property Options).

Financial Guidance Items

   --       Return on investment materially in excess of the Group's weighted average cost of capital. 

-- Earnings enhancing from first full year: 2022 profit before tax expected to be impacted by well documented supply constraints ; profit before tax increases in 2023 and achieves normalised levels from 2024/2025 .

-- Integration programme to deliver optimal profitability from 2024/2025 . Integration planning well underway; non-underlying integration costs of c.GBP10.0m over two years.

-- Acquisition fees of approximately GBP1.3m plus stamp duty of approximately GBP1.0m in 2021 .

-- Underlying effective tax rate expected to remain at c.21-22% (subject to any changes in the prevailing tax rates).

-- Enlarged Group's ongoing capital expenditure (including maintenance expenditure) expected to increase by only c.GBP2.5m per year, reflecting the well-invested nature of Motorline's properties.

   --       Option to purchase two further strategic freehold properties for GBP24.9m. 
   --       Initial fair value estimates to be included in the Group's 2021 full year results . 

-- Limited net debt expected at 31 December 2021 even if Property Options are exercised before then; the Group's balance sheet remains strong.

ENDS

For further information and enquiries please contact:

 Marshall Motor Holdings plc                   c/o Hudson Sandler 
 Daksh Gupta, Chief Executive Officer          Tel: +44 (0) 20 7796 
                                                4133 
 Richard Blumberger, Chief Financial Officer 
 Investec Bank plc (Financial Adviser,         Tel: +44 (0) 20 7597 
  NOMAD & Broker)                               5970 
 Christopher Baird 
 David Anderson 
 Hudson Sandler                                Tel: +44 (0) 20 7796 
                                                4133 
 Nick Lyon 
  Bertie Berger 
 Nick Moore 

Notes to Editors

About Marshall Motor Holdings plc ( www.mmhplc.com )

The Group's principal activities are the sale and repair of new and used vehicles. Following the Acquisition, the Group's businesses have a total of 164 franchises covering 27 brands, across 37 counties in England and Wales. In addition, the Group operates 10 trade parts specialists, seven used car centres, six standalone body shops and one pre delivery inspection centre.

In April 2021 the Group was recognised by the Great Place to Work Institute, being ranked the 12(th) best place to work in the UK (super large company category). This was the eleventh year in succession that the Group has achieved Great Place to Work status.

LEI number: 213800BP3HZWHDWXAY78

This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the Group is Stephen Jones, Group Counsel and Company Secretary.

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. The Group undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

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