Landscape products group Marshalls (MSLH) gained 1.3% to 628p as it posted first-half revenue down by a quarter year-on-year but said recent trading had topped expectations.

In a half-year trading update, the company announced that revenue for the six months ended 30 June 2020 was £210.5 million, compared to £280.1 million in the same period a year earlier, representing a decrease of 25% year on year.

Marshalls said that trading in June was 'better than expected', with revenue 2% ahead of June 2019, with the benefit of two extra trading days, while on a like-for-like basis, the June average daily revenue was down 7% compared to the prior year period.

But the company called this a 'significant improvement' on April, which was 66% down on a like-for-like basis, and said that the improved level of trading has continued into the early part of July.

It reported 'strong' sales to the domestic end market, suggesting households have been looking to upgrade their outside spaces during lockdown.

A 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 remaining within the housebuilding sector.

Net debt as at 30 June 2020 was £53.9 million which it said better than management's base case scenario and reflected the 'encouraging' recent trading performance.

Marshalls said it has not been required to access its additional bank facilities or the approved Covid Corporate Financing Facility (CCFF) commercial paper programme and that it has total bank facilities of £255m, of which £230m are committed, together with an issuer limit of £200m under its CCFF facility.

Canaccord Genuity analyst Aynsley Lammin commented: ‘The group has issued a good trading update with revenue down, but less than feared, in the first half and a good recovery in sales since lockdown ended. The update confirms that sales have recovered strongly since being down by 66% in April and the recovery seen has continued into July.

‘Clearly, it must help that laying paving is mainly outside work and the weather has been relatively good. The improved trading has seen net debt fall from £69m at the end of April to a level of c.£54 million at the end of June which is similar to the prior year; it appears the group has seen a good cash inflow from selling down stock that was built up into the spring selling season.’


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Issue Date: 16 Jul 2020