Marshalls Plc – Half-year Report June 2021

Marshalls plc

(the “Company” or the “Group”)

Strong growth in first half – positive trading outlook

Marshalls plc, the specialist Landscape Products group, announces its interim results for the half year ended 30 June 2021.

Operational highlights

· Priority continues to be given to health and safety

· Strong trading and healthy order books

• Continued focus on customer service and satisfying increased demand
• National manufacturing network and logistics efficiency continuing to enable operational flexibility
• Proactive supply chain management to mitigate material shortages
• Ongoing focus on ESG leadership and priorities
• Sustained emphasis on innovation and sustainable growth over the medium term
• Capital investment of £30 million planned for 2021 – St Ives dual block plant build has commenced

Financial highlights

· Half year revenue of £298.1 million (2020: £210.5 million) – up 42% against 2020 and up 6% against 2019

• Continued strong growth in Domestic – up 54% against 2020 and up 17% against 2019
• Public Sector and Commercial sales growth up 40% against 2020 and up 1% against 2019 (3% on a like-for-like basis)
• International sales growth of 11% against 2020 and 27% against 2019

· Profit before tax up 5% against 2019

• Operating margin in line with 2019 at 13.8% (2019: 13.9%)

· Strong balance sheet, with a flexible capital structure and a clear capital allocation policy

• Reported net debt of £52.4 million (2020: £98.9 million; 2019: £97.7 million
• Net debt of £7.6 million on a pre-IFRS 16 basis (2020: £53.9 million; 2019: £55.6 million)
• Operating cash flow (“OCF”) to EBITDA at 93% for the twelve months ended 30 June 2021

· Interim dividend of 4.70 pence

Commenting on these results, Martyn Coffey, Chief Executive, said:

“Trading continues to improve and recent order intake has been good. The Construction Products Association's recent summer forecast predicts year on year increases in UK market volumes of 13.7 per cent in 2021 and 6.3 per cent in 2022 and the Group expects to meet or outperform the market. Market conditions remain supportive, despite certain supply chain challenges, which are leading to inflationary pressures across the sector. The underlying indicators in our main growth markets, including New Build Housing, Road, Rail and Water Management, remain positive. As a result, we remain confident that our strategy will deliver long-term profitable growth and that we are well positioned to cope with the temporary challenges associated with cost and material supply issues.

Encouraged by the continuing strength in demand and the positive trading environment, the Board is confident of making further progress and is accordingly raising its expectations for 2021 and 2022.”

Notes:

1.  Alternative performance measures are used consistently throughout this Interim Report.  These relate to like-for-like, EBITA, EBITDA, return on capital employed (“ROCE”), net debt and, for the half year ended 30 June 2020, results before operational restructuring costs and asset impairments. Following the transition to IFRS 16, reference has been made to “pre-IFRS 16”, “pre-IFRS 16 net debt” and “reported basis,” the latter referring to amounts required under IFRS 16. For further details of their purpose, definition and reconciliation to the equivalent statutory measures, see Note 3.

2.  In order to provide a more relevant performance commentary, comparison in this statement has been made to the corresponding six month period in both 2020 and 2019, the latter considered to represent a more meaningful pre-COVID-19 baseline for performance comparisons.