Marshalls sees improved trading as Covid lockdown eases

Landscape products company Marshalls said interim revenues had fallen due to the coronavirus lockdown, but reported better-than-expected trading in June and July as businesses reopened.

The company on Thursday reported a 25% fall in revenue for the six months to June 30 June to £210.5m. June revenue was up 2% year on year, but 7% lower on a like-for-like basis.

“This improved level of trading has continued in the early part of July. All continuing manufacturing sites are now fully operational and have been reorganised to accommodate appropriate social distancing requirements without any loss of productivity,” Marshalls said.

July trading continued to improve, well above the 66% plunge in April like-for-like revenue.

Marshall said sales to the domestic end market were strong, with the survey of domestic installers at the end of June 2020 showing a 'healthy' order book of 12.4 weeks, compared to 11.5 weeks in June 2019 and 9.7 weeks in February this year.

In the public sector and commercial end market, Marshalls confirmed that infrastructure sales were strong, but warned of some uncertainty in the housebuilding sector.

Net debt as at 30 June 2020 was £53.9m, ahead of management's base case scenario. Marshalls said it had needed to access additional bank facilities or the approved Covid Corporate Financing Facility (CCFF) commercial paper programme.

It added that it had total bank facilities of £255m, of which £230m were committed, together with an issuer limit of £200m under its CCFF facility.

“Whilst business confidence and market demand remain uncertain, recent trading has been better than expected and continues to improve. The restructuring programme and the new bank facilities have served to further strengthen the group and ensure it is well placed both to manage the ongoing impact of Covid-19 and future growth opportunities,” the company said.