Marshalls Regulatory News (MSLH)

Interim Management Statement: 15 May 2013

Trading Performance

Marshalls' revenue from continuing operations for the nineteen weeks ended 10 May 2013 was £103 million (2012: £109 million), a decrease of 6 per cent. Underlying activity was in line with expectations but the delay in the normal seasonal upturn due to adverse working conditions, including the coldest March since 1910, reduced revenue in the period. Order intake has recovered strongly since the middle of April to offset the shortfall and the programme of cost reduction and cash realisation measures, instigated in 2012, continues to deliver positive results. 

In addition to the Group revenue from continuing operations, the quarries and associated aggregate businesses, sold on 30 April 2013, had revenues of £3 million (2012: £3 million) in the period. This will be treated as a discontinued operation.

Sales to the Public Sector and Commercial end market, which represent approximately 65 per cent of Marshalls' sales, were down 6 per cent on a continuing basis. The Group continues to devote resources to its sales effort and is pleased to announce that it has recently secured a contract to supply stone cladding to a significant project in the City of London that is expected to generate sales in excess of £5 million over the next two years.

Sales to the Domestic end market, which represent approximately 30 per cent of Group sales, were down 8 per cent. Encouragingly, the survey of domestic installers at the end of April 2013 revealed order books of 8.5 weeks (2012: 7.5 weeks) up from 7.8 weeks at the end of February 2013 (2012: 6.3 weeks).

Continued progress has been made in developing the International business, with revenue to date in 2013 increasing by 7 per cent and representing 5 per cent of Group sales.

On 30 April 2013 the Group received cash consideration of £17.5 million from its sale of quarries and associated aggregate businesses to Breedon Aggregates England Limited. This has further helped reduce net debt which at the end of April 2013 was £28 million lower than at the same stage in 2012. The Group is on course to improve on its target of achieving a net debt to EBITDA ratio of 2 times by the end of 2013.

Outlook

The Construction Products Association is currently forecasting a reduction in UK market volumes in 2013 of 2.1 per cent with the majority of this reduction in the first quarter. For 2014 and 2015 the forecast is for growth of 1.9 per cent and 3.9 per cent respectively. 

Marshalls has built increased financial and operational flexibility into its business model and remains focused on product innovation and a range of initiatives to deliver sales growth and improve trading margins. There is no change in expectations for the current year and the Group continues to be well placed to benefit as market conditions improve.

Enquiries:

15 May 2013

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. 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 2012.