Marshalls Regulatory News (MSLH)

Trading Performance

Marshalls' revenue for the four months ended 30 April 2008 increased 3 per cent to £135 million (2007: £130 million). On a like for like day for day basis, revenue was up 1 per cent. Acquisitions contributed £1 million to Group revenue.

Strategy

We continue with our strategy to invest selectively in growth opportunities to expand the business, to reduce cost and invest in productivity improvements, to develop an integrated product offer for the Public Sector and Commercial market and to invest in sales and marketing to create "pull through demand" in the Domestic market. Marshalls has a strong balance sheet and we retain a strong emphasis on cash management. 

Group Developments

For the Public Sector and Commercial market, during 2007, we invested £12 million in new facilities for sandstone walling, sand and gravel extraction, crushed aggregates and ready to use mortar. This is part of our strategy to expand our natural stone facilities geographically across Britain and to utilise our expanded mineral reserve base. All these projects are now operational and beginning to contribute sales. 

In January, we secured access to extensive reserves to enable us to develop a Cotswold limestone walling business. This will complement our existing sandstone walling business. We will invest in plant to establish this business during 2008. 

In the Domestic market our sponsorship of the RHS Chelsea Flower Show is in its second year. This is part of our strategy to continue to build awareness of the Marshalls brand, create "pull through demand" and improve product mix for the Marshalls Registered Installer base and our builders' merchant stockists. This year at the RHS Chelsea Flower Show we will be exhibiting a large garden design with the theme of "The Garden That Kids Really Want". This is intended to engage younger people in garden design and is part of our longer term brand awareness strategy.

We now have eight Display Centres operational around the country (2007: three) and have plans to open a further two during 2008. These Display Centres give the consumer the opportunity to see Marshalls' products in a garden setting. Our customer service teams are there to help the consumer with product choice and selection, to find a Marshalls Registered Installer or to provide a fully designed and project managed installation.

In the first quarter of 2008 we completed the sale of two surplus properties and received gross cash proceeds of £10 million generating a profit on sale of £1 million.

Outlook

The Public Sector and Commercial market, which represents 55 per cent of Group revenue, remains robust and lead indicators are positive for 2008. In the Domestic market, in our survey, installer order books at the end of April 2008 were 8.2 weeks compared with 8.4 weeks which we reported at the time of our preliminary results announcement. Historically, order books in the March / April period have been 2007: 9.7 weeks, 2006: 9.5 weeks and 2005: 8.6 weeks.

We continue with our development plans and will maintain a strong emphasis on cash management. The strength of our brand, our efficient manufacturing and sourcing, and our comprehensive distribution network give us confidence for the future.