TIDMMSLH
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
TSTAPMRTMTJMBBJ
(END) Dow Jones Newswires
May 09, 2023 02:00 ET (06:00 GMT)
Marshalls (LSE:MSLH)
Historical Stock Chart
From Oct 2024 to Nov 2024
Marshalls (LSE:MSLH)
Historical Stock Chart
From Nov 2023 to Nov 2024
