Marshalls plc
(‘Marshalls’ or ‘Group’)
Full Year Trading Update
Notice of results
Group revenue for the year ended 31 December 2022 was £719 million (2021: £589 million), which represents year-on-year growth of 22 per cent including the benefit of the acquisition of Marley. On a like-for-like basis, Group revenue growth was one per cent. The Group’s performance in the period since the trading update on 7 October 2022 has been as anticipated and the Board expects to deliver adjusted profit before tax for the full year that is in-line with current market expectations1.
Trading performance
Marshalls Landscape Products experienced tough market conditions due to its exposure to the more discretionary elements of private housing RMI, delivering revenue of £394 million (2021: £425 million), which represents a reduction of seven per cent compared with the prior year. The rate of contraction in the fourth quarter moderated to 12 per cent compared to 16 per cent in the third quarter reflecting a more stable inventory profile in the distribution channel. The decisive actions taken to reduce production capacity and the cost base, were concluded in November, the effect of which was to reduce annual operating costs by approximately £10 million.
Marshalls Building Products traded robustly in 2022, despite experiencing some slowing of activity in the final quarter of the year with poor weather disrupting construction sites in December. Revenue grew by 17 per cent to £193 million (2021: £164 million) with a particularly strong performance from the Bricks and Masonry business.
Marley Roofing Products delivered revenue of £132 million in the eight months of ownership, which represents growth of six per cent compared to the corresponding period in 2021. The rate of revenue growth moderated during the second half of the year due to a softer market backdrop and destocking in the distribution channel, with revenue in the final quarter being in-line with 2021. The integration of Marley into the Group continues to progress in-line with plan, and the Board remain confident of extracting value from operational improvements and leveraging best practices within the Group.
Balance sheet and liquidity
The Group’s balance sheet continues to be robust, with good progress made to reduce leverage. Pre-IFRS16 net debt ended the year at £191 million, reflecting strong working capital management. The Group maintained good headroom against its bank facility and covenants which, when combined with the strong cash generative nature of the Group, enables continued focus on the Board’s capital allocation priorities, whilst reducing leverage.
Outlook and notice of results
Whilst mindful of the uncertain macro-economic environment and its impact on the sector, the Board remains confident of making continued progress towards Marshalls’ ambition to become the UK’s leading manufacturer of products for the built environment. The Group remains well placed to achieve this goal, supported by its diversified products and end markets, strong market positions, established brands and focused investment plans to drive further operational improvements.
The Group will announce its results for the year ended 31 December 2022 on 15 March 2023, at which time it will provide further guidance on the year ahead.
1 Company compiled market consensus for 2022 adjusted profit before taxation is £90.4 million with a range of £89.8 million to £91.1 million.
Enquiries:
| Martyn CoffeyJustin Lockwood | Chief ExecutiveChief Financial Officer | Marshalls plc | +44 (0)1422 314777 |
| Tim Rowntree | MHP Communications | +44 (0)20 3128 8540 | |
| Charlie Barker | +44 (0)20 3128 8147 |