Source - RNS
RNS Number : 1334T
Marshalls PLC
16 July 2020
 

 

LEI: 213800S21IFC367J5V62

 

Half Year Trading Update: 16 July 2020

 

Marshalls plc, the specialist landscape products group, issues a Trading Update and further information on its response to the COVID-19 outbreak, ahead of its half year results due to be announced on 15 September 2020.

 

Trading and operational performance

 

Our priority continues to be the safety and well-being of our employees, suppliers and customers and we aim to ensure that our health and safety practices are in line with recommended guidelines.

 

Revenue for the 6 months ended 30 June 2020 was £210.5 million (2019: £280.1 million) which represents a decrease of 25 per cent year on year. Trading in June was better than expected with revenue 2 per cent ahead of June 2019, with the benefit of 2 extra trading days. On a like for like basis the June average daily revenue was down 7 per cent compared to the prior year period. This is a significant improvement as April was 66 per cent down 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.

 

Sales to the Domestic end market have been strong, with the survey of domestic installers at the end of June 2020 showing a healthy order book of 12.4 weeks (June 2019: 11.5 weeks; February 2020 9.7 weeks). In the Public Sector and Commercial end market, infrastructure sales remain strong although there remains some uncertainty within the housebuilding sector.

 

Balance sheet and liquidity

 

As at 30 June 2020, the Group had net debt of £53.9 million, on a pre-IFRS 16 basis (2019: £55.6 million). This is ahead of management's base case scenario and reflects the encouraging recent trading performance. We continue to monitor cash flows closely.

 

As a result of the recent improving trading levels, we have not been required to access our additional bank facilities or the Group's approved Covid Corporate Financing Facility ("CCFF") commercial paper programme. Marshalls' liquidity is strong and will support our investment priorities going forward. The Group has total bank facilities of £255 million, of which £230 million are committed, together with an issuer limit of £200 million under its CCFF facility.

Restructuring

 

We continue to take all appropriate steps to support the long-term interests of the business, its colleagues and other stakeholders. As previously announced, the Group entered into consultation with colleagues as part of a series of restructuring proposals, covering all parts of the business and including selective site closures. The restructuring programme is now substantially complete. The flexibility and improved efficiency of our plants means that capacity has not been materially reduced. The cost of the restructuring programme will be booked in the accounts for the 6 months to 30 June 2020.

 

Outlook

 

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. Our aim is to protect the long term sustainability of the business and to ensure that the Group remains focused on its strategic objectives.

 

Against this background the Board expects to be able to give a clearer outlook once the trading performance for both July and August have been assessed. In the interim, financial guidance remains suspended.

 

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.

 

Enquiries:

  Martyn Coffey

Chief Executive

Marshalls plc

+44 (0)1422 314777

  Jack Clarke

Group Finance Director

 

Marshalls plc

+44 (0)1422 314777

  Andrew Jaques

 

MHP Communications

  +44 (0)20 3128 8540

  Charlie Barker

 

 

 

 

Note to the Editor:

 

About Marshalls:

 

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.

 

Forward-Looking Statements:

 

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.


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