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Marshalls Plc - Final Results

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Marshalls Plc

Preliminary results for the year ended 31 December 2019

Marshalls plc, the specialist Landscape Products group, announces its full year results for the year ended 31 December 2019

Financial Highlights

Year ended

31 December

2019

Year ended

31 December

2018

 

Increase

%

 

 

 

 

Revenue

 

£541.8m

£491.0m

10

EBITDA - reported

EBITDA - pre-IFRS 16

£103.9m

£90.1m

£80.8m

£80.8m

29

12

Operating profit - reported

Operating profit - pre-IFRS 16

£73.7m

£72.6m

£64.8m

£64.8m

14

12

Profit before tax - reported

Profit before tax - pre-IFRS 16

£69.9m

£70.1m

£62.9m

£62.9m

11

11

 

 

 

 

Basic EPS - reported

29.36p

26.29p

12

Basic EPS -  pre-IFRS 16

29.48p

26.29p

12

 

 

 

 

Total dividends - ordinary and supplementary

18.35p

16.00p

15

Final ordinary dividend - recommended

9.65p

8.00p

21

Discretionary supplementary dividend -  recommended

4.00p

4.00p

-

 

 

 

 

ROCE - reported

ROCE - pre-IFRS 16

 

21.4%

23.7%

21.9%

21.9%

 

Up 180 basis points

Net debt - reported

Net debt - pre-IFRS 16

£60.0m

£18.7m

£37.4m

£37.4m

 

Notes:

1.  The financial impact of IFRS 16 is summarised below and in Note 1.

2.  Alternative performance measures are used consistently throughout this Preliminary Announcement.  These relate to EBITA, EBITDA, ROCE and net debt. For further details of their purpose, definition and reconciliation to the equivalent statutory measures, see Note 2.

Highlights:

  • Revenue growth of 10% to £541.8 million (2018: £491.0 million)
  • Continued improvement in operating margins which increased to 13.4% (2018: 13.2%)
  • Profit before tax up 11% to £69.9 million on a reported basis (2018: £62.9 million)
  • ROCE improved to 23.7% (2018: 21.9%) on a pre-IFRS 16 basis and on a reported basis was 21.4%
  • Reported EPS up 12% to 29.36 pence (2018: 26.29 pence)
  • Edenhall performed well in the period and its operational integration is complete
  • Strong cash generation has continued with operating cash flow at 96% of EBITDA
  • Net debt of £18.7 million (2018: £37.4 million) on a pre-IFRS 16 basis
  • Reported net debt of £60.0 million, after the inclusion of £41.3 million of IFRS 16 lease liabilities
  • Recommended final ordinary dividend increased by 21% to 9.65 pence (2018: 8.00 pence) per share
  • Recommended supplementary dividend of 4.00 pence per share made possible by strong cash management

The new 5 year Strategy, launched in June 2019, maintains the objective of delivering sustainable growth. The main elements are:

  • Continued focus on organic growth and investment - capital expenditure of £20 million planned for 2020 to drive growth
  • Increasing momentum in the delivery of the digital strategy through continued investment and continuous improvement
  • Increase in research and development and new product development to drive sales growth
  • Renewed focus on increasing the profitability of the Emerging UK Businesses
  • Continuing to target selective bolt-on acquisition opportunities in New Build Housing, Water Management and Minerals
  • Continued focus on customer service, brand, operational and manufacturing excellence and procurement efficiency
  • Maintaining a strong balance sheet, a flexible capital structure and a clear capital allocation policy
  • Maintaining a 2 times earnings cover dividend policy, enhanced by supplementary dividends

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

"The Group has delivered further growth in 2019 despite a period of market slowdown and economic and political uncertainty. The CPA's recent Winter Forecast predicted an increase in UK market volumes of 0.6 per cent in 2019 followed by a decrease of 0.3 per cent in 2020. The underlying indicators in our key New Build Housing, Road, Rail and Water Management markets remain supportive.

The Board believes that the Group's new 5 year Strategy will continue to deliver sustainable growth, whilst maintaining a strong balance sheet and a flexible capital structure. The strategy is underpinned by positive market fundamentals, focused investment plans and an established brand."