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Marshalls: trading statement
Marshalls, a supplier of concrete paving stones and other building supplies said that turnover for the year to December 2005 rose by 9% to £359m. The growth was largely due to acquisitions; on a like for like basis, sales from continuing operations were up only 1% at £332m. Acquisitions contributed £27m.
Sales to the public sector and commercial market (which account for half of group revenue) were 4% ahead of last year. The company says demand in this sector remains robust. Sales to the domestic sector of the market were down 1% and were particularly weak in the DIY market.
A production unit in Mansfield was closed in December (as a result of productivity gains from recent capital investment); the costs of this closure being covered by the sale of surplus property for £4.4m.
Growth this year has been driven largely by acquisitions and while the overall result is likely to be in line with market expectations the signs of the slowdown is apparent. The company’s strengths are its relatively resilient product mix (paving, walling, summerhouses, greenhouses, garages, water management, kerb, traffic management and street furniture) and its operational efficiency; and while it may well outperform the sector, the continued sluggishness of the housing market dampens the medium term horizon.
The share trades at 310.75p, on a prospective PE (2006 earnings) of 15.5x at the top end of the sector range with a yield of 4.2%.
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