‘Transformational’ Acquisition of Marley Boosts Marshalls Half Year Performance

IN ITS HALF year report, Marshalls plc, the construction product manufacturer, has attributed its trading performance increases to its ‘transformational’ acquisition of the Marley Group.

Reporting an adjusted operating profit for Marley of £8.6 million since its acquisition on 29 April 2022, the company adds Marley “traded positively in the post-acquisition period” and its integration is ‘in line with its plan’.

Marshalls reports revenue growth of 17% reflecting two months contribution from Marley and growth of 7% on a like for like basis.

Adjusted operating profit for Marshalls as a whole is up 15% on 2021 at £48m and the company says this was largely driven by the benefit of Marley, together with a strong performance from Marshalls Building Products. Adjusted profit before tax is £44.6m, up 13% on last year.

Transformational Acquisition

The acquisition of the roof tile manufacturer further diversifies and extends Marshall’s coverage of construction market sub-sectors, the company says. Marshalls says the Marley acquisition enhances the Group’s exposure to the cyclically resilient UK roofing RMI market, which has a strong medium-term outlook, underpinned by attractive structural drivers such as the UK’s ageing housing stock with a product range principally focused on less discretionary products.

The company’s net debt of £252.3 million reflects the bank funding to partially pay for the acquisition of Marley and it quotes the Construction Product Association Summer Forecast of growth this year and next in the industry, of 2.5% and 1.6% respectively.

It adds that the Marshalls and Marley businesses employ a similar commercial strategy that focuses on generating pull demand from key specifiers and influencers. Marshalls says the integration process is ‘progressing well’ and there is a clear cultural alignment between the businesses.

Marley Positive Balance

Martyn Coffey, Marshalls Chief Executive, said: “Marshalls delivered a robust first half trading performance, demonstrating the strength of our business model and the benefits of greater diversification resulting from the transformational Marley deal completed in April 2022 and other acquisitions of recent years.

“Looking forward, the Board acknowledges that the macro outlook is becoming less certain due to geopolitical events driving up inflation and adversely impacting consumer confidence.

“Notwithstanding this, the Board’s expectations for the Group as a whole remain in line with market expectations for the full year, with the more positive backdrop within Marshalls Building Products and Marley expected to balance the continuation of tougher trading conditions in Marshalls Landscape Products, which has greater exposure to the discretionary element of private housing RMI.”

Merchant Digital Trading Plans

The half year report outlines plans for Marshalls’ new digital trading platform offering an extended range of Marshall products on merchants’ websites without requiring the merchant to stock the ranges. It says customers will be able to place orders with the merchants that will be fulfilled using Marshalls’ distribution network.

The model offers a win-win outcome, according to Marshalls, where the merchant generates additional sales without incurring the normal costs of stocking products and Marshalls benefits by realising additional sales via the merchant channel. The company expects to pilot this offer with two national merchants in the second half of the year.

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