REG - Marshalls PLC - Trading Statement

MarshallsAnnouncement

18/01/2024 07:00

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RNS Number : 0617A  Marshalls PLC  18 January 2024

18 January 2024

 

Marshalls plc

('Marshalls' or 'Group')

 

Full year trading update and notice of results

 

The Group's performance in the period since the trading update on 18 October
2023 has been as anticipated and the Board expects adjusted profit before tax
for the full year to be in-line with its expectations.

 

Trading performance

Group revenue for the year ended 31 December 2023 was £671 million (2021:
£719 million), which represents a year-on-year reduction of seven per cent
including the benefit of an additional four months of trading from Marley. On
a like-for-like basis, Group revenue contracted by 13 per cent. This
performance reflects lower demand from house builders and continued subdued
activity in private housing RMI.

 

Marshalls Landscape Products' revenue was £321 million (2022: £394 million),
which represents a reduction of 18 per cent.  On a like-for-like basis, after
adjusting for the disposal of Marshalls NV in April 2023, revenues contracted
by 16 per cent.  Marshalls Building Products' revenue was £170 million
(2022: £193 million), a reduction of 12 per cent.  Marley Roofing Products'
revenue was £180 million (May to December 2022: £132 million), which
represents a reduction of nine per cent on a like-for-like basis.

 

Management actions

During the year, management took decisive actions to improve agility and
right-size the business through reducing capacity and costs.  This included
the closure or mothballing of factories, a reduction in shifts and capacity in
other facilities, and a reorganisation of commercial and support functions.
These actions are expected to deliver net annualised savings of around £11
million, which is £2 million higher than previous estimates.  In addition,
management reviewed and reprioritised capital expenditure plans, executed a
programme of surplus land disposals that generated around £7 million, and
focused on efficient working capital and cash management to reduce the Group's
net debt.

 

Importantly, management balanced the need to reduce capacity and the cost base
in the short-term while retaining the flexibility to increase production when
demand recovers. The Group has significant latent capacity across all its
businesses to satisfy materially higher demand than current levels.

 

Balance sheet and liquidity

The Group's balance sheet remains robust, with good progress made to reduce
leverage, and the Group ended the year with pre-IFRS16 net debt of £173
million (December 2022: £191 million, September 2023: £190 million).  The
strong cash generation during the year facilitated a £30 million reduction of
the Group's term loan to £180 million in early January 2024, ensuring
efficient management of borrowings and finance costs.  The Group's revolving
credit facility of £160 million was undrawn at the year-end, which, together
with the reduced term loan, provides the Group with significant liquidity to
fund its strategic and operational plans going forward.

 

Outlook

Execution of the Group's strategy is underpinned by our strong market
positions, established brands and focused investment plans to drive ongoing
operational improvement. Notwithstanding the anticipated short-term
challenges, the Board remains confident that the long-term market growth
drivers and a focus on executing key strategic initiatives, will underpin a
material improvement in profitability when markets recover.  The Board is
encouraged recently by the more positive inflation trends and the consequent
impact on interest rate expectations, which should support progressive
improvements in the Group's end markets during 2024.

 

Notice of results

The Group will announce its results for the year ended 31 December 2023 on 18
March 2024, at which time it will provide further guidance on the year ahead.

 

Enquiries:

 

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

 Matt Pullen       Chief Executive Designate

 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 sustainable solutions 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.

 

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