Trading Update: 12 November 2020
Marshalls plc, the specialist landscape products group (the "Group"), issues a Trading Update with an improved outlook.
Trading since the half year, has continued to improve and in the 4 months ended 31 October 2020, Group sales have returned to the same level as 2019 on a like for like basis. The trend of sales growth has continued to increase during this period and, on a like for like basis, Group sales in October 2020 were up 5 per cent compared with the equivalent prior year period. The key drivers of this growth have been continued strong demand in the Domestic end market, a return to more normal levels of trading in the Public Sector and Commercial end market and continued strong growth in the International market.
For the 4-month period ended 31 October 2020, sales to the Domestic end market were up 10 per cent on a like for like basis compared with the prior year. The survey of domestic installers at the end of October 2020 continued to show a healthy order book of 12.8 weeks (October 2019 10.9 weeks). For the 4-month period ended 31 October 2020, sales in the Public Sector and Commercial end market were 6 per cent down compared with 2019, on a like for like basis, which is a significant improvement compared with the first six months of the year when sales were down 28 per cent. The Group continues to target those parts of the market where higher levels of growth are anticipated including infrastructure projects in Road, Rail and Water Management. For the 4-month period ended 31 October 2020, sales in the International business increased by 22 per cent compared with the prior year, on a like for like basis, supported by continuing strong sales from Marshalls NV in Belgium.
The construction and manufacturing sectors are exempt from England, Scotland and Wales second COVID-19 national lockdown restrictions. All manufacturing sites are fully operational and our priority continues to be the safety and well-being of our employees, suppliers and customers. We continue to ensure that our health and safety practices are ahead of recommended COVID-19 guidelines.
Repayment of furlough
On 2 October the Group repaid the full amount of all furlough monies received, amounting to £9.4 million.
As previously announced, during the second quarter of the year, the Board and Executive management agreed to a 20 per cent reduction in remuneration and other Senior Managers also agreed a 15 per cent reduction. These amounts, totalling £120,000, have subsequently been paid to MacMillan Cancer Support and to MIND who are the Company's charities.
Balance sheet and liquidity
As at 31 October 2020, and following the repayment of furlough, the Group had net debt of £42.8 million, on a pre-IFRS 16 basis (£53.9 million, 30 June 2020). This is better than expected and reflects the recent trading performance. We continue to monitor cash flows closely.
As a result of the good, recent trading levels we have not needed to access our additional bank facilities or the Group's approved Covid Corporate Financing Facility ("CCFF") commercial paper programme. Marshalls liquidity remains strong and will support our investment priorities going forward.
Trading continues to improve and order books are robust. Although market demand remains uncertain, we remain focused on developing future growth opportunities and delivering the strategic objectives in our 5 year Strategy. Our strategy is underpinned by strong market positions, focused investment plans and an established brand.
Following the strength of recent trading the Board is improving its expectations for 2021.
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
+44 (0)1422 314777
Group Finance Director
+44 (0)1422 314777
+44 (0)20 3128 8540
Note to the Editor:
Established in the late 1880s, Marshalls is the UK's leading manufacturer of superior natural stone and innovative concrete hard landscaping products, supplying the construction, home improvement and landscape markets. Marshalls provides the product ranges, design services, technical expertise, innovative ideas and inspiration to transform gardens, drives and public and commercial landscapes.
Marshalls operates its own quarries and manufacturing sites throughout the UK, including a national network of manufacturing and distribution sites, and has operations in Belgium and sales representation in other international markets. As a major plc, Marshalls is committed to quality in everything it does, including the achievement of high environmental and ethical standards and continual improvement in health and safety performance.
Any statements in this release, to the extent that they are forward-looking, are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the markets in which Marshalls operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. More information about the factors that may affect Marshalls' performance is contained in the Annual Report to shareholders for the year ended 31 December 2019.