TIDMMSLH
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 GBP528 million (2022: GBP544
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 HY June Q3 YTD September
growth
Marshalls Landscape Products -18% -8% -15%
-------- ----- --------------
Marshalls Building Products -9% -14% -11%
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Marley Roofing Products -7% -7% -7%
-------- ----- --------------
Group -13% -9% -12%
-------- ----- --------------
Marshalls Landscape Products' revenue for the period was GBP257
million (2022: GBP311 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 GBP133
million (2022: GBP149 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 GBP138
million (May to September 2022: GBP84 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 GBP9 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 GBP6
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 GBP190 million at the end of September
(September 2022: GBP222 million; June 2023 GBP185 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:
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.
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END
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