Marshalls PLC Trading Update (5189Y)
May 18 2016 - 2:00AM
UK Regulatory
TIDMMSLH
RNS Number : 5189Y
Marshalls PLC
18 May 2016
Trading Update: 18 May 2016
Trading Performance
The underlying indicators within the business remain strong and
the Board is confident of achieving its expectations for 2016
through continuing good operational margin performance.
Marshalls' UK revenue for the 4 months ended 30 April 2016 was
up 1 per cent at GBP120 million (2015: GBP119 million). This
increase is against strong comparatives for 2015 and reflects a
slight softening in Commercial sales over the last 2 months. The
Group has maintained its market share during this period although
some customer projects have been delayed in response to short term
uncertainty in the wider economy as highlighted by the Construction
Products Association's ("CPA") most recent industry data.
Sales in the Public Sector and Commercial end market, which
represented approximately 64 per cent of Marshalls' total sales,
were in line with the prior year period. The Group continues to
target those parts of the market where higher levels of growth are
anticipated, such as Rail, Newbuild Housing, Water Management and
Street Furniture.
Sales in the Domestic end market, which represented
approximately 31 per cent of Marshalls' total sales, were up 4 per
cent compared with the prior year period. The survey of domestic
installers at the end of April 2016 revealed order books of 12.4
weeks (2015: 10.6 weeks) and compared with 10.5 weeks at the end of
February 2016. At 12.4 weeks, this is the highest order book to be
reported at this time of year.
The pipeline for major UK infrastructure projects remains strong
and the construction schedule has extended. Furthermore, orders
received in the Commercial end market, representing almost GBP4
million more than sales in the period, have not been fulfilled as
expected reflecting caution from clients regarding the wider
economy. The wet ground conditions early this year have deferred
progress on many construction sites in both Commercial and Domestic
end markets. Whilst local government landscape spend is subdued,
this should eventually return. Indian Sandstone import prices have
fallen over the year, however, we reduced our prices and thus our
revenue and have maintained margins. The market in Europe remains
challenging and International revenue for the 4 months ended 30
April 2016 represented 5 per cent (2015: 6 per cent) of Marshalls'
total sales.
The Group continues to deliver strong operational cash flows
through the continuation of the close control of inventory and the
effective management of working capital. Net debt at 30 April 2016
was GBP33.5 million (2015: GBP60.7 million).
A key focus of the 2020 Strategy announced in March this year is
to deliver organic growth through capital investment projects and
operational efficiency initiatives; these initiatives are
progressing well. Targeted bolt-on acquisitions are expected to
complement the organic growth within the 2020 Strategy and progress
continues to be made in this area.
Outlook
The CPA's Spring Forecast predicts growth in UK market volumes
of 3.0 per cent in 2016 and growth of 3.6 per cent in 2017. This
reflects a slight downward revision from the Winter Forecast
although the CPA continues to highlight strong fundamentals across
the Construction sector.
Marshalls remains well placed to deliver the growth initiatives
set out in the 2020 Strategy and the Group continues to derive
benefits from its operational gearing together with driving through
sustainable cost reductions and improvements in operational
efficiency.
The Board is confident of achieving its expectations for 2016
and believes the outlook for the Group continues to be
positive.
Enquiries:
+44 (0)1422
Martyn Coffey Chief Executive Marshalls plc 314777
Jack Clarke Finance Director
+44 (0)20
Andrew Jaques MHP Communications 3128 8540
James White
Note to the Editor:
About Marshalls:
Established in the late 1880s, Marshalls 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 provides the product ranges,
design services, technical expertise, innovative ideas and
inspiration to transform gardens, drives and public and commercial
landscapes.
Marshalls operates its own quarries and manufacturing sites
throughout the UK, including a national network of manufacturing
and distribution sites, and has operations in Belgium and sales
representation in other international markets. As a major plc,
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.
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
2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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