REG - Marshalls PLC - Trading Statement

MarshallsAnnouncement

18/10/2023 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:20231018:nRSR4412Qa&default-theme=true

RNS Number : 4412Q  Marshalls PLC  18 October 2023

18 October 2023

 

Marshalls plc

('Marshalls' or the 'Group')

 

Trading update

 

Full year expectations remain unchanged

 

Marshalls plc, a leading manufacturer of products for the built environment,
provides the following trading update for the nine month period ended 30
September 2023.

 

The Group delivered revenue of £528 million (2022: £544 million), which is
three per cent lower than the corresponding period in 2022 and includes the
contribution of four additional months of revenue from Marley. On a
like-for-like basis, Group revenue contracted by 12 per cent.  In the third
quarter, Group revenue contracted by nine per cent on a like-for-like basis,
which compares to a reduction of 13 per cent in the first half of the year.
The decisive actions taken by management in response to market conditions,
that were summarised in the half year results, have been largely concluded.
The Board's expectations for the full year remain unchanged.

 

Divisional trading performance

 

 Like-for-like revenue growth  HY June  Q3    YTD September
 Marshalls Landscape Products  -18%     -8%   -15%
 Marshalls Building Products   -9%      -14%  -11%
 Marley Roofing Products       -7%      -7%   -7%
 Group                         -13%     -9%   -12%

 

Marshalls Landscape Products' revenue for the period was £257 million (2022:
£311 million), which represents a reduction of 17 per cent compared to
2022.  On a like-for-like basis, after adjusting for the disposal of
Marshalls NV in April 2023, revenues contracted by 15 per cent.  The
like-for-like rate of contraction slowed in the third quarter to eight per
cent from the 18 per cent reported at the half year, driven by softer prior
year comparatives and a seasonal weighting towards commercial products, which
have performed better than those sold into the domestic market.

 

Marshalls Building Products' revenue for the period was £133 million (2022:
£149 million), a reduction of 11 per cent over the prior year.  The rate of
contraction in the third quarter increased to 14 per cent compared to nine per
cent reported at the half year.  The rate of revenue decline in the drainage
and aggregates businesses moderated in the third quarter; however, this was
offset by a slowing in the bricks and mortars businesses, which had been
broadly flat in the first half.

 

Marley Roofing Products' revenue for the period was £138 million (May to
September 2022: £84 million), which represents a reduction of seven per cent
on a like-for-like basis. This rate of contraction was in-line with the
performance in the first half of the year.  In the third quarter, the Group
reported a moderation of the decline in the traditional roofing business
offset by a softer performance from Viridian Solar, due to weakness in the new
build market.

 

Management actions

As summarised in the half year results, management took decisive actions to
improve agility and right-size the business through reducing capacity and
costs and maintaining a disciplined approach to cash management.  This
necessitated the closure of a factory, a reduction in shifts and capacity in
other facilities, and a reorganisation of Marshalls' commercial team focused
on simplifying the business.  These actions were largely concluded by the end
of the third quarter and are expected to deliver annualised savings of around
£9 million.  Management is delivering the reduced capital expenditure plans
set out earlier in the year, executing a programme of surplus land disposals
that has generated around £6 million in the year to date, and focusing on
efficient working capital management in order to reduce the Group's net debt.

 

Importantly, management has balanced the need to reduce capacity and the cost
base in the short-term while retaining the flexibility to increase production
when demand recovers. Management continues to review opportunities to improve
efficiency without compromising longer-term capacity flexibility. The Group
has latent capacity across all its businesses that can satisfy materially
higher demand than that being currently experienced.

 

Balance sheet and liquidity

The Group's balance sheet remains robust, with pre-IFRS16 net debt of
approximately £190 million at the end of September (September 2022: £222
million; June 2023 £185 million), with the year-on-year reduction reflecting
the cash generative nature of the business and management's focus on working
capital.  The Board's ongoing priority is to reduce leverage and it remains
confident of reporting a reduction in net debt at the full year.

 

Outlook

Trading in the third quarter was in-line with the Board's expectations which
anticipated a sustained period of lower volumes.  The Board does not expect
any material changes in current trading patterns during the fourth quarter of
the year and therefore remains confident of achieving a result that is in-line
with its expectations for 2023.

 

Enquiries:

 

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

   Justin Lockwood     Chief Financial Officer

   Tim Rowntree                                  MHP Communications  +44 (0)20 3128 8540
   Charlie Barker                                                    +44 (0)20 3128 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 (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  TSTMRBRTMTTBBAJ