REG - Marshalls PLC - Q3 Trading Update

MarshallsAnnouncement

16/10/2024 07:00

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RNS Number : 3140I  Marshalls PLC  16 October 2024

16 October 2024

 

Marshalls plc

('Marshalls' or 'the Group')

 

Q3 Trading Update

 

Marshalls, a leading manufacturer of sustainable solutions for the built
environment, provides the following trading update for the nine months ended
30 September 2024.

 

Overview

 

 ·             Resilient performance in continued weak end markets with YTD Group revenue of
               £476 million (2023: £528 million):
               o                                        Group revenue during Q3 was three per cent lower than the prior year: a
                                                        material improvement over the 12 per cent like-for-like reduction in H1
               o                                        Double-digit growth in Roofing Products in Q3 driven by a very strong Viridian
                                                        Solar performance
               o                                        Flat revenues in Building Products in Q3 together with a lower rate of
                                                        contraction in Landscape Products during Q3 compared to H1
 ·             Pre-IFRS16 net debt reduced in Q3 to £149 million driven by continued focus
               on cash management
 ·             Capital Markets Event scheduled for 19 November 2024, to set out the Group's
               medium-term growth opportunities
 ·             The Board expects that the full year profit will be in-line with its previous
               expectations

 

Divisional trading performance

 

 Like-for-like revenue growth  HY June  Q3    YTD September
 Landscape Products            -19%     -13%  -17%
 Building Products             -6%      0%    -4%
 Roofing Products              -5%      12%   0%
 Group                         -12%     -3%   -9%

 

Landscape Products' revenue in the period was £209 million (2023: £257
million), which represents a like-for-like reduction of 17 per cent compared
to 2023. The like-for-like rate of contraction slowed in the third quarter to
13 per cent from the 19 per cent reported at the half year, principally driven
by a moderation in the decline in new house building and private housing RMI
end markets. The Board continues to focus on its transformation programme to
strengthen the leadership team and customer relationships and improve the
performance of the segment.

 

Building Products' revenue was £128 million (2023: £133 million), which
represents a reduction of four per cent over the prior year with Q3 being
in-line with 2023. The Q3 performance comprises growth in the drainage and
bricks businesses, which was offset by a contraction in revenues in the
mortars and aggregates businesses.

 

Roofing Products' revenue was £139 million (2023: £138 million), marginally
ahead of the prior year. In the third quarter, the segment delivered growth of
12 per cent which comprised a modest increase in Marley, together with growth
of around 70 per cent in Viridian Solar. The increase in Viridian Solar was
driven by a combination of the continued ramp-up in activity arising from Part
L building regulations that are focused on increasing energy efficiency, and
weaker prior year comparatives as new build housing volumes slowed in the
second half of 2023.

 

Balance sheet and liquidity

The Group's balance sheet continues to be robust, with pre-IFRS16 net debt of
£149 million at the end of September 2024 (September 2023: £190 million,
June 2024: £156 million).  Net debt is therefore £41 million lower than the
prior year, reflecting strong organic cash generation and a continued focus on
cash management.  The Group repaid a further £25 million of its term loan in
early October 2024 to optimise its financing costs and, following this
payment, the outstanding balance is £155 million. The Group's £160 million
revolving credit facility was undrawn at the end of the period.

 

Strategy

The ongoing review of the Group's strategy has identified a number of
opportunities to deliver relative outperformance over the medium term. These
include an increased focus on attractive sustainability-driven markets across
bricks and masonry, water management and energy transition alongside the
expected cyclical recovery in the core landscape and roofing businesses,
supported by the impact of the Government's commitment to increase
housebuilding significantly. More information will be provided at the Capital
Markets Event on 19 November 2024.

 

Outlook

In anticipation of a continued improving demand environment for the Group's
products, the Board expects that profit for the full year will be in line with
its previous expectations and that pre-IFRS16 net debt will be modestly better
than its previous expectations.

 

Enquiries:

 

 Marshalls plc
 Matt Pullen, Chief Executive               +44 1422 314777

 Justin Lockwood, Chief Financial Officer
 Hudson Sandler (Financial PR)
 Mark Garraway                              +44 20 7796 4133

 Nick Lyon                                  marshalls@hudsonsandler.com (mailto:marshalls@hudsonsandler.com)

 Harry Griffiths

 India Laidlaw

 

Note to the Editor:

 

About Marshalls plc:

 

Established in the late 1880s, Marshalls plc is a leading UK manufacturer of
sustainable solutions for the built environment.  It operates through three
trading divisions: Landscape Products; Building Products; and Roofing
Products.  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.  Building Products is a
supplier of concrete drainage products, concrete bricks, ready-to-use mortars
and aggregates.  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 2023.

 

 

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