Marshalls stacks up cash as it improves profits at home and abroad

Marshalls Group, the maker of paving slabs, street furniture and floor tiles, posted a solid set of interim results on Thursday, reporting increased revenue thanks to a 17% year-on-year increase in domestic sales.

The £219.1m in revenue, up 8% year-on-year, was additionally bolstered by the firms international business which increased 25% in the six months leading up to 30 June, as revenue increased in all of the groups major market locations, leading to the establishment of its new sales office located in Dubai.

Sales to the public sector, which accounts for 60% of the group's overall sales, increased 3% as Marshalls continued its focus on this market, anticipating increased levels of growth in new build housing, water management, and rail services.

In residential, Marshalls highlight early pension withdrawals and pent up demand as key drivers of growth.

Operating profit increased 14% to £29.8m, EBITDA was up 13% to £36.7m and earnings per share jumped 16% to 12.04p

Marshalls also moved from a net debt position of £8.8m at the same time last year to a net cash position of £1.2m.

Chief executive Martyn Coffey said, "The group continues to invest in product innovation and service delivery initiatives and is well placed to drive through further sustainable improvements in operational efficiency gains.

"The board believes that Marshalls' innovative product range and strong market positions will continue to support growth and operational profit improvements during the delivery of the 2020 Strategy and will drive future shareholder returns.

"The group's focus remains the delivery of the growth initiatives set out in the 2020 Strategy, whilst maintaining a strong balance sheet and a flexible capital structure."

As of 0825 BST, shares had stepped up 4.05% to 416.71p.

Digging into the detail, broker Shore Capital noted that the domestic order book remained healthy at 11.9 weeks, despite the company increasing its Marshalls accredited installer base to circa 2,000 teams.

"We note that the strong performance of Marshalls in this space is in contrast with replacement window firms Epwin and Safestyle who both recently warned of a slowdown in household [repair, maintenance and improvement] spend."