REG - Marshalls PLC - Trading Statement

MarshallsAnnouncement

11/05/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220511:nRSK0118La&default-theme=true

RNS Number : 0118L  Marshalls PLC  11 May 2022

Marshalls plc

 

Trading Update: 11 May 2022

 

Ahead of its Annual General Meeting at 11:00 today, Marshalls plc, a leading
manufacturer of products for the build environment, issues a trading update
for the first four months of its 2022 financial year

 

Trading performance

 

Group revenue for the four months ended 30 April 2022, was up 7 per cent at
£201 million against the same period last year, on an equivalent days' basis.
During this period, there was one less trading day compared with 2021 and
reported sales increased by 5 per cent. This was achieved against a very
strong comparator period, which included record seasonal sales volumes in
March and April 2021, and was supported by the successful implementation of
price increases at the start of 2022.

 

Revenue in the Public Sector and Commercial end market for the four months
ended 30 April 2022 was £137 million and accounted for 68 per cent of Group
sales. This represents an increase of 14 per cent compared with the same prior
year period on an equivalent days' basis, which reduces to 12 per cent on a
reported basis. Sales have been particularly strong in Civils & Drainage
and Bricks & Masonry and the strength of the concrete brick performance
has been particularly encouraging, with a strong New Build Housing market
underpinning this demand. The Group continues to focus on those areas of the
market where higher levels of growth are expected, being New Build Housing and
infrastructure projects in Road, Rail and Water Management.

 

Revenue in the Domestic end market, which represented approximately 26 per
cent of Group sales was £52 million. This represents a reduction of 8 per
cent compared with 2021 on an equivalent days' basis, and 9 per cent on a
reported basis. Order books have remained very healthy in a historical context
with the survey of domestic installers at the end of April 2022 showing an
order book of 19.4 weeks (2021: 17.2 weeks). However, despite end customer
demand being strong, there was a reduction in installer capacity in March and
April compared to the prior year, largely due to more holidays being taken in
2022 compared to 2021 when the country was in lockdown. The comparative
picture is expected to progressively normalise during the remainder of the
year.

 

Sales in the International business for the four months ended 30 April 2022
increased by 3 per cent compared with 2021 and includes Marshalls NV in
Belgium, which was also against a very strong comparative result in 2021.

 

Acquisition of Marley

 

Marshalls completed the strategically important acquisition of Marley Group
plc on 29 April 2022. Marley is a leader in the manufacture and supply of
pitched roof systems to the GB construction market and is a market-leading
brand.  The acquisition strengthens the Group's exposure to the cyclically
resilient and growing UK RMI end market, which has a strong medium-term
outlook underpinned by attractive structural drivers such as the UK's ageing
housing stock.  There is a strong cultural alignment with Marshalls with both
businesses employing a similar commercial strategy that focuses on generating
pull demand from key specifiers and influencers.  In addition, there are
clear opportunities to leverage Marshalls' operational, manufacturing and
sustainability expertise for Marley's business. It will operate as a division
within the Group and the integration process is now well underway.  Marley
has a track record of consistent profit growth and cash generation and has
started 2022 strongly, with trading for the first four months of the year
ahead of plan and the 2021 comparatives.

 

Following the acquisition of Marley, the Group has reviewed its reporting
segments. The Directors have concluded that, going forward, the Group will
report under three separate reporting segments, namely Marshalls Landscape
Products, Marshalls Building Products and Marley Roofing Products.

 

Balance sheet and liquidity

 

The Group continues to have a strong balance sheet supported by a conservative
and flexible capital structure.

 

The Group had net debt at 30 April 2022 of £86 million (2021: £98 million).
On a pre-IFRS 16 basis net debt was £45 million (2021: £52 million).  On 3
May 2022, the Group drew down a new four-year term loan of £210 million to
support the funding of the acquisition of Marley. In addition to the term
loan, the Group has entered into a new committed revolving credit facility of
£160 million with a maturity date of four years. On a pro forma basis, the
Group expects to maintain a net debt to EBITDA multiple of less than 1.5 times
on both a reported and a pre-IFRS 16 basis for 2022. Good headroom is
maintained against the new bank facility and its covenants, which will support
investment priorities going forward.

 

Outlook

 

The Construction Products Association's recent Spring forecast predicts an
increase in UK market volumes of 2.8 per cent in 2022 and 2.2 per cent in
2023, which is a modest reduction from the previous Winter forecast and
reflects a more uncertain trading environment. The Group continues to operate
in an inflationary environment and it remains confident that input cost
increases can be passed on through the supply chain.

 

The Board remains focused on developing future growth opportunities,
delivering the strategic objectives set out in the 5-year Strategy and
realising the opportunities that the acquisition of Marley will bring to the
Group. The Board is confident of achieving its 2022 expectations, which have
been increased to include a material contribution from the acquisition of
Marley.

 

 

Enquiries:

 

    Martyn Coffey       Chief Executive           Marshalls plc       +44 (0)1422 314777

    Justin Lockwood     Chief Financial Officer

    Andrew Jaques                                 MHP Communications  +44 (0)20 3128 8540
    Charlie Barker

 

Note to the Editor:

 

About Marshalls plc:

Established in the late 1880s, Marshalls plc 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 provides the product ranges, design services, technical expertise,
innovative ideas and inspiration to transform gardens, drives and public and
commercial landscapes. Following the acquisition of Marley, the Group is now
also 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 its own quarries and manufacturing sites throughout the UK,
including a national network of manufacturing and distribution sites, and has
operations in Belgium and sales representation in other international
markets.  As a major plc, 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.

 

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 2021.

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTAMMFTMTIBBRT