Marley Announces Intention to Float on Stock Market

PITCHED ROOF TILE MANUFACTURER, Marley has announced its intention to sell shares in the company on the stock market.

Marley’s parent company, Monty Topco Ltd announced an initial public offering (IPO) to launch shares in the company on 16 September 2021.

Marley says it is the largest manufacturer of roofing tiles in the UK, with an estimated market share of 21%. Since COVID-19, the company says it has seen a strong recovery, with sales volumes recovering towards 2019 levels and operating profit (EBIT) growing to 24% in the six months to June 2021, with profitability sustained despite raw material price increases.

In Marley’s last filed accounts the parent company reported operating profit to the end of December 2020 as £5,282,000. After interest and tax, there was an overall loss of £27,157,000.

Marley Offering

Marley was established in 1924 and has built a prominent reputation in UK roofing. It was bought out by Belgium based private equity firm Inflexion in 2019. Marley operates from eight production and distribution facilities, which are three concrete tile factories, one clay tile factory, one timber production site, one solar panel facility and two distribution centres (all of which are freehold, save for the solar distribution facility). In addition, the Marley Group owns a clay quarry. It reports a headcount of 570 and is headquartered in Burton-on-Trent. The Group also operates a contracting division in Scotland, primarily offering roofing and main contracting services.

Products

Marley’s roof tile range includes a range of concrete and clay fittings, timber battens, roofing accessories and roof-integrated solar PV panels, following the completed acquisition of Viridian Solar in April this year.

Demand

Demand for Marley’s products is driven by the repair, maintenance and improvement market from where an estimated 53% of the Group’s revenues are generated. With approximately 65% of homes in the UK built before 1974, this demand is underpinned by the country’s rapidly ageing housing stock which requires ongoing roof renovation and replacement, the company says.

Marley also points out the structural deficit of new build housing in the UK with the directors expecting that 180,000 homes will be built in 2021 compared to the Government’s target of 300,000. This ensures a long-term residential new build growth requirement, supporting future demand across all of Marley’s products, it says. Marley’s integrated solar roof system is also expected to benefit from government initiatives to improve the energy efficiency of new build housing.

Paul Lester CBE, Marley Group Chairman, said: “The Group’s differentiated proposition is underpinned by significant market demand thanks to the UK’s rapidly ageing housing stock. The structural undersupply of new homes, which is high on the political agenda and supported by multiple government policies, is also a key demand driver.

“Led by a highly experienced management team, the Group has delivered a resilient financial performance throughout the economic cycle, resulting in industry leading margins and high cash generation. This, coupled with a clear strategy for growth through further innovation, acquisitions and brand extension, means that the Group is well placed to build on its strong momentum to date.”

Growth

There are strategic plans for both organic growth, through market development and innovation, and inorganic growth, through acquisitions and brand expansion. The Group is targeting medium term organic revenue growth of 10% and an underlying EBIT margin of 20%.

David Speakman, Chief Executive of Marley, said: “Our business combines the most comprehensive pitched roofing system available and well-invested, freehold production sites across the country which can provide significant additional capacity as needed. This, combined with a number of positive market dynamics, gives us the confidence to pursue our growth agenda and we see multiple opportunities for both organic and inorganic expansion.”

Marley is targeting a free float of at least 25% of its issued share capital and expects it would be eligible for inclusion in the FTSE UK.