Specialist building products firm Marshalls (MSLH) demonstrates good progress on its 2020 strategy with an excellent set of 2018 results. The shares respond with a 2.6% advance to 559.5p, close to an all-time high.

Marshalls is focused on landscaping products such as bollards and paving slabs. Despite an uncertain outlook for the wider construction space, it continues to tick along nicely with like-for-like sales growth of 8% in January and February 2019.

Despite a fair amount of spend on acquisitions, on top of organic investment in the business, the company felt sufficiently confident to pay a special dividend of 4p on top of ordinary dividends for the year as a whole of 12p.


For 2018 revenue is up 14% to £491m, pre-tax profit is up 21% to £62.9m and return on capital employed (ROCE) ticks up from 20.8% to 21.9%. As a rule of thumb, companies generating returns on capital in excess of 15% can be considered high quality businesses.

The company says it has come up with a Brexit plan including specific measures in its supply chain to mitigate the risks of raw material shortages.


Canaccord Genuity analyst Aynsley Lammin is impressed. He says: 'Marshalls has delivered another good set of results, slightly better than expected with PBT of £62.9m (CG expected £62m). It has announced another supplementary dividend of 4p which was a bit of a surprise given the recent step up in acquisition spend; cash-flow towards the end of the year was good.

'Management continues to deliver well against its 2020 strategy and is seeing the benefits from recent investment come through. Operating margins increased with a strong ROCE at circa 22%. The recent acquisitions are being well integrated. Management is now looking at developing a 2023 strategy to build upon what it has already delivered.'

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Issue Date: 14 Mar 2019