Marshalls PLC – Half-year Report

Marshalls plc, the specialist Landscape Products group, announces its half year results

Note:

Alternative performance measures are used consistently throughout this Interim Announcement.  These relate to EBITA, EBITDA and ROCE.  For further details of their purpose, definition and reconciliation to the equivalent statutory measures, see Note 3.

Highlights:

·      Strong revenue growth for the half year despite severe weather impact

·      Operating margins slightly ahead to 13.7% (2017: 13.6%)

·      Recent trading very strong – both June and July revenues up 21%

·      CPM Group Limited performed well in the period and its integration is on track and well advanced

·      The Group's strong cash generation has continued

·      Net debt of £48.9 million (31 December 2017: £24.3 million), reflecting the purchase of CPM for £41.4 million

·      Payment of £21.3 million final and supplementary dividends on 29 June 2018

·      Return on capital employed for the 12 months ended 30 June 2018 continues at circa 20% (31 December 2017 : 20.8%)

The 2020 Strategy continues to deliver long-term sustainable EBITDA growth, high ROCE and a strengthened brand:

               ·      Capital expenditure of £28 million planned for 2018 to support growth and deliver cost savings of £5 million per annum by

                    2019

               ·      Research and development expenditure increased to £2.2 million (2017: £1.7 million) coupled with new product

                    development and service to drive sales growth

               ·      Focus on increasing the profitability of the Emerging UK Businesses continues

               ·      Digital strategy gaining momentum and delivering real benefits across the business

               ·      Continue to target selective bolt-on acquisition opportunities

               ·      Maintained a 2 times dividend cover policy, enhanced by supplementary dividends

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

 “The Group continues to outperform the Construction Products Association's (“CPA”) growth figures, despite ongoing macroeconomic uncertainty.  The CPA's recent Summer Forecast predicts a decrease in UK market volumes of 0.6 per cent in 2018, followed by an increase of 2.3 per cent in 2019, while the underlying indicators in the New Build Housing, Road, Rail and Water Management markets remains supportive. Recent trading has been very strong with both June and July revenues up 21 per cent against the prior year period.

 The self help programme to support organic growth is progressing well and the integration of CPM Group Limited (“CPM”) is on track with post acquisition trading continuing strongly. The Board believes that Marshalls' innovative product range and strong market positions mean the Group is well placed to deliver continued future growth. The Group's focus remains the delivery of long-term sustainable growth, whilst maintaining a strong balance sheet and a flexible capital structure.

 The Board remains confident of achieving its expectations for 2018.”

 There will be a presentation for analysts and investors today at 9.00 am with a telephone dial in facility available tel: number +44 (0)330 336 9411 – Access Code: 1478410.  Marshalls' Analyst Presentation will be available for analysts and investors who are unable to attend the presentation. The presentation can be viewed on Marshalls' website at www.marshalls.co.uk.