Marshalls PLC
16 August 2023
Management actions position the Group well for when markets normalise
Marshalls plc, a leading manufacturer of sustainable solutions for the built environment, announces its results for the half year ended 30 June 2023
Highlights
| £M | H1 2023 | H1 2022 | Change (%) |
| Revenue | 354.1 | 348.4 | 2% |
| Adjusted results (Notes 1 and 2) | |||
| Adjusted EBITDA | 58.8 | 64.2 | (8%) |
| Adjusted operating profit | 41.9 | 48.0 | (13%) |
| Adjusted profit before tax | 33.2 | 44.6 | (26%) |
| Adjusted basic EPS – pence | 10.2 | 16.4 | (38%) |
| Adjusted proforma ROCE (%) | 10.6 | 13.4 | (2.8ppts) |
| Statutory results | |||
| Operating profit | 26.8 | 27.3 | (2%) |
| Profit before tax | 16.7 | 23.9 | (30%) |
| Basic EPS – pence | 5.2 | 7.9 | (34%) |
| Interim dividend – pence | 2.6 | 5.7 | (54%) |
| Net debt | 230.0 | 252.3 | 9% |
| Pre-IFRS 16 net debt | 184.6 | 208.2 | 11% |
Financial, operational, and strategic highlights
| · | Revenue growth of two per cent over 2022 including an additional four-month contribution from Marley; revenue contracted by 13 per cent on a like-for-like basis |
| · | Adjusted profit before tax of £33.2 million, a reduction of 26 per cent on 2022. Profit before tax on a statutory basis was £16.7 million (H1 2022: £23.9 million) including the impact of adjusting items of £16.5 million (H1 2022: £20.7 million) |
| · | Group strategy refreshed and being implemented throughout the organisation |
| · | Decisive action taken to streamline manufacturing capacity and the cost base, resulting in £9 million of annualised savings |
| · | Flexibility maintained in the manufacturing network to respond rapidly to produce higher volumes when market normalises |
| · | Net debt of £184.6 million (on a pre-IFRS 16 basis) reduced by £23.6 million since June 2022, with leverage of 1.6 times adjusted EBITDA. Reported net debt of £230.0 million (H1 2022: £252.3 million) |
| · | Syndicated bank facility extended by 12 months to April 2027 further improving security of medium-term funding |
| · | Exited the Group’s Belgian operation allowing the Group to focus on the UK construction market |
Outlook
| · | The challenging trading environment is expected to persist in the second half of the year and into 2024 |
| · | Against this backdrop, the Board will continue to focus on actions to minimise cost, improve agility and control cash flows alongside ensuring that the business is well positioned to respond when the Group’s end markets start to recover |
| · | The Board remains confident that these actions, together with the long-term market growth drivers and a focus on executing key strategic initiatives, will underpin a material improvement in profitability when market conditions normalise |
Commenting on the results, Martyn Coffey, Chief Executive, said:
“Market conditions in new house building and private housing RMI were challenging in the first half of the year, which led to a material reduction in volumes across all three of our reporting segments. This resulted in a significant decline in Group profitability compared to the first half of 2022. We have responded by taking action to improve our agility, reduce capacity, take cost out of the business, and manage cash. Regrettably, these actions necessitated in a reduction of approximately 250 roles across the organisation. However, we have been careful to ensure that we have sufficient latent manufacturing capacity that will allow us to respond quickly when there is an improvement in market conditions.
Our refreshed strategy is underpinned by our strong market positions, established brands and focused investment plans to drive ongoing operational improvement. Notwithstanding 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 market conditions normalise.”
There will be a live presentation today at 09:00am at the offices of Peel Hunt for analysts and investors, which will also be webcast live. The presentation will be available for analysts and investors who are unable to view the webcast live and can be accessed on Marshalls’ website at www.marshalls.co.uk. Users can register to access the webcast using the following link:
https://brrmedia.news/marshalls.hy.23
There will also be a telephone dial in facility available Tel: UK-Wide: +44 (0) 33 0551 0200 and quote password “Marshalls HY Results” if prompted by the operator.