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MSLH Marshalls Plc

274.80
10.20 (3.85%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Marshalls Plc LSE:MSLH London Ordinary Share GB00B012BV22 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  10.20 3.85% 274.80 273.20 273.80 273.80 263.60 264.80 599,969 16:35:28
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Construction Matl-whsl, Nec 721.4M 26.79M 0.1060 25.83 692.14M

Marshalls PLC Trading Statement (6703Y)

09/05/2023 7:00am

UK Regulatory


Marshalls (LSE:MSLH)
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From Mar 2023 to Mar 2024

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RNS Number : 6703Y

Marshalls PLC

09 May 2023

9 May 2023

Marshalls plc

('Marshalls' or 'Group')

Trading Update

Ahead of its Annual General Meeting tomorrow, Marshalls plc, a leading manufacturer of products for the built environment, provides the following trading update for the four months to April 2023.

Group revenue for the four months ended 30 April 2023 was GBP227 million (2022: GBP202 million), which represents year-on-year growth of 12 per cent including the benefit of the acquisition of Marley. On a like-for-like basis, Group revenue contracted by 14 per cent reflecting the uncertain macro-economic climate, a reduction in new house building and continued weakness in private housing RMI activity.

In the first quarter of the year, National House Building Council new housing starts were 27 per cent lower than 2022, which had an impact on the performance of all the Group's reporting segments. Management have acted quickly to reduce costs in the business and are accelerating plans to improve production efficiency, whilst ensuring flexibility to respond when market demand improves.

Divisional trading performance

Marshalls Landscape Products has continued to experience tough market conditions due to its exposure to new house building and the more discretionary elements of private housing RMI. Against this backdrop, it delivered revenue of GBP110 million (2022: GBP140 million), which represents a reduction of 21 per cent compared to 2022.

Marshalls Building Products delivered revenue of GBP55 million (2022: GBP61 million), which represents a contraction of nine per cent. Revenue in the bricks and masonry and mortars businesses was modestly lower year-on-year, whilst drainage and aggregates were held back by deferred new housing starts.

Marley Roofing Products delivered revenue of GBP61 million, which represents a contraction of six per cent compared to the corresponding period in 2022. Viridian delivered further strong growth in integrated solar revenues supported by changes in building regulations, which was offset by a weaker performance in roofing due to lower volumes of new build housing.

Strategic developments

Following the reduction in the cost base and manufacturing capacity implemented in the second half of last year in Marshalls Landscape Products, further actions have been taken to remove around 70 indirect roles in the Marshalls businesses, which will result in annualised savings of around GBP3.5 million. The Board will continue to monitor performance and respond flexibly to evolving market conditions to ensure that the Group's manufacturing capacity and cost base are aligned to market demand. In addition, in order to leverage Marley's excellent commercial strengths, we are pleased to have promoted Marley's commercial leader to take responsibility for the trading activities of Marshalls Landscape and Building Products.

The Group successfully completed the disposal of its former Belgian subsidiary in April 2023, which simplifies operations and enhances the Group's focus on the UK construction market. This business contributed revenue of GBP21 million and an operating loss of GBP0.7 million in 2022.

Good progress continues to be made with the integration of Marley. The early successes regarding the reduction of vacancies have been maintained. The increase in efficiencies has also been upheld across the concrete tile production lines, which has resulted in a significant reduction in lead times across several product lines. This has enabled the business to deliver a much more targeted approach to asset failures and refurbishment.

Balance sheet and liquidity

The Group's balance sheet continues to be robust, with pre-IFRS16 net debt of GBP220 million at the end of April. The increase since December 2022 year end of GBP29 million reflects seasonal working capital trends and is in-line with the Board's expectations. The Board's ongoing priority is to reduce leverage utilising free cash flow generated by the Group, and its net debt expectations for the full year remain unchanged.

Outlook

The Board remains confident that the Group is well placed to deliver profitable long-term growth when market conditions improve and continues to focus on its key strategic initiatives. In the near-term, the macro-economic climate is expected to remain challenging and the trading performance in the year to date has been weaker than originally anticipated.

The Board's expectations for 2023 were set with reference to the Construction Products Association's ('CPA') Winter forecast that was published in January 2023. The CPA reduced its 2023 construction output forecast earlier this month. This was principally driven by a six-percentage point deterioration in new build housing to a year-on-year contraction of 17 per cent. The CPA cited reduced demand in the wake of the mini budget, the consequential sharp rise in mortgage rates and the end of Help to Buy as contributing factors for the downgrade.

Taking these factors together, the Board now expects to deliver a result that is lower than its original expectations.

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014), as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Enquiries:

 
                     Chief Executive 
 Martyn Coffey        Chief Financial 
  Justin Lockwood     Officer            Marshalls plc         +44 (0)1422 314777 
                                                                   +44 (0)20 3128 
 Tim Rowntree                             MHP Communications                 8540 
                                                                   +44 (0)20 3128 
 Charlie Barker                                                              8147 
 

Note to the Editor:

About Marshalls plc:

Established in the late 1880s, Marshalls plc is a leading UK manufacturer of products for the built environment. It operates through three trading divisions: Marshalls Landscape Products; Marshalls Building Products; and Marley Roofing Products. Marshalls Landscape Products is the UK's leading manufacturer of superior natural stone and innovative concrete hard landscaping products, supplying the construction, home improvement and landscape markets. Marshalls Building Products is a supplier of concrete drainage products, concrete bricks, ready-to-use mortars and aggregates. Marley Roofing Products is a leader in the manufacture and supply of pitched roofing systems, including clay and concrete tiles, timber battens, roof integrated solar solutions and roofing accessories.

The Group operates a national network of manufacturing and distribution sites throughout the UK. Marshalls is committed to quality in everything it does, including the achievement of high environmental and ethical standards and continual improvement in health and safety performance. Its strategic goal is to become the UK's leading manufacturer of products for the built environment.

Forward-Looking Statements:

Any statements in this release, to the extent that they are forward-looking, are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the markets in which Marshalls operates. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a wide range of variables, which could cause actual results to differ materially from those currently anticipated. More information about the factors that may affect Marshalls' performance is contained in the Annual Report to shareholders for the year ended 31 December 2022.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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(END) Dow Jones Newswires

May 09, 2023 02:00 ET (06:00 GMT)

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