Marshalls Regulatory News (MSLH)

Trading Update: 10 December 2015

Improved full year outlook driven by ongoing performance gains

Trading Performance

Marshalls' revenue for the eleven months ended 30 November 2015 was up 8 per cent at £365 million (2014: £338 million) despite strong comparatives versus the second half of 2014. The Group continues to experience robust order intake alongside encouraging sales growth in its main end markets and overall trading momentum continues to be positive.

Sales to the Public Sector and Commercial end markets, which now represent approximately 66 per cent of Group sales, were up 11 per cent compared with the prior year period. Commercial work from Water Management, Street Furniture, Rail and Newbuild Housing continues to increase and the Group continues to outperform the market in these areas.

Sales to the Domestic end market, which represent approximately 29 per cent of Group sales, were up 3 per cent compared with the prior year period. The survey of domestic installers at the end of October 2015 revealed order books of 11.2 weeks (October 2014: 11.9 weeks) and compares with 12.0 weeks at the end of June 2015.

Adjusting for currency movements, revenues from the International business, representing approximately 5 per cent of Group sales, increased by 2 per cent in the eleven months ended 30 November 2015. Due to the adverse movement in exchange rates, however, this translated to a fall of 5 per cent once converted into sterling. The Group has made continued progress in developing the International business, and the opening of a sales office in Dubai, which will facilitate further sales growth in the Middle East, is now well advanced.

Continued performance improvement has been delivered in the smaller UK businesses and revenue for the eleven months ended 30 November 2015 was up 14 per cent. The smaller UK businesses include Street Furniture, Mineral Products and Stone Cladding. The turnaround in these smaller UK businesses in the year to date is ahead of our previous expectations with a consequent improvement in profitability of approximately £1m now expected for the current financial year.

There has been continued focus and consequent improvement in working capital management.

Dividend

The 2015 interim dividend of 2.25 pence per share, announced on 28 August 2015, was paid on 4 December 2015 to shareholders registered at the close of business on 23 October 2015.

Outlook

The strength of trading in the last quarter of the year has resulted in the Board revising its expectations for the current year to be ahead of its previous view.

The Construction Products Association's Autumn Forecast predicts growth in UK market volumes of 3.6 per cent in 2015 and 3.8 per cent in 2016, which represents a slight decrease compared with the previous Summer Forecast. Notwithstanding this, the Group remains well positioned to grow organically, and selectively through acquisitions, and continues to invest in product innovation and service delivery initiatives to deliver improved trading margins and increased return on capital employed.

Enquiries:

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 2014.