REG - Marshalls PLC - Full Year results
17/03/2025 07:15
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RNS Number : 8633A Marshalls PLC 17 March 2025
17 March 2025
Full Year results for the 12 months ended 31 December 2024
Resilient performance in 2024 with strong foundations in place to drive
medium-term outperformance
Marshalls plc, a leading manufacturer of sustainable solutions for the built
environment, announces its results for the year ended 31 December 2024.
· Resilient Group performance reflecting decisive management actions and
diversification strategy
· Focused improvement actions in Landscaping Products gaining traction, revenue
growth expected in 2025
· Strong performance by Roofing Products that has continued into 2025
· Building Products returned to profit growth and is well positioned for 2025
· Balance sheet strengthened through further reduction in net debt
· 'Transform & Grow' strategy launched in November 2024 and being rolled out
at pace
Financial summary
£'M 2024 2023 Change
Revenue 619.2 671.2 (8%)
Adjusted results (Notes 1 and 2 below)
Adjusted EBITDA 97.8 103.6 (6%)
Adjusted operating profit 66.7 70.7 (6%)
Adjusted profit before tax 52.2 53.3 (2%)
Adjusted basic EPS - pence 16.0 16.7 (4%)
Adjusted annualised ROCE (%) 8.2 8.4 (0.2ppts)
Final dividend (proposed) - pence 5.4 5.7 (5%)
Total dividend (proposed) - pence 8.0 8.3 (4%)
Pre-IFRS 16 net debt 133.9 172.9 23%
Reported results
Operating profit 53.9 41.0 31%
Profit before tax 39.4 22.2 77%
Basic EPS - pence 12.3 7.4 66%
Financial highlights
· Financial performance benefited from efficiency gains and cost reductions,
together with strong performances from Roofing and Building Products
· Adjusted operating cashflow conversion was strong at 106 per cent (2023: 106
per cent), reflecting disciplined working capital management
· Robust balance sheet with a year-on-year pre-IFRS16 net debt reduction of £39
million
· Year end leverage substantially improved to 1.5 times adjusted EBITDA (2023:
1.9 times)
Outlook
· The Board expects a market recovery later this year, which should strengthen
progressively
· This confidence is underpinned by the Government's ambition to reinvigorate
new house building and to invest in the nation's infrastructure alongside
further likely cuts to the base rate
· The Group is well-placed to leverage this recovery through its diverse
portfolio of businesses, as evidenced by the encouraging performances in
Roofing and Building Products, which currently deliver 80 per cent of profits,
and the benefit of operational leverage
· This strength will be further bolstered by an improved performance in
Landscaping Products, profitable growth through the execution of the
'Transform & Grow' strategy, and capitalising on a market recovery
· The Group is well positioned to respond swiftly to improving activity levels
as key end markets recover and the Board remains confident about delivering a
material increase in profitability and returns over the medium-term
Matt Pullen, Chief Executive, commented:
"I am pleased to report our results for what has been an important year for
Marshalls, where the Group has shown resilience in challenging markets by
restricting the reduction in profit before tax to two per cent despite an
eight per cent contraction in revenue. During the year, we also launched our
'Transform & Grow' strategy which establishes a solid foundation for
future market outperformance across our diverse and balanced business
portfolio.
We are particularly pleased with the growth in Roofing Products in the year.
Marley Roofing returned to growth in the second half of the year and Viridian
Solar performed strongly driven by the increased adoption of in-roof solar
solutions in new housing. Our Building Products segment, including Marshalls
Bricks and Marshalls Water Management, has also strengthened, with revenues
improving sequentially in the second half, good profit growth for the full
year and an expanding order book.
The positive performances of our Roofing and Building Products, which
contributed more than 80 per cent of our profit in 2024, highlight the
strength of a diverse portfolio. The focused improvement plans in Landscaping
that were implemented last year are gaining traction and will deliver a
progressive and significant improvement in profitability. Additionally, our
disciplined focus on working capital management has strengthened our balance
sheet through a £39 million reduction in pre-IFRS16 net debt. I am proud of
the Group's performance and deeply grateful to all my colleagues for their
support, hard work and dedication throughout the year.
As we look ahead, we are encouraged by the Government's commitment to boosting
new house building and investing in national infrastructure, which together
with our 'Transform & Grow' strategy and the positive impact of
operational leverage, will benefit all our businesses in the medium term. In
the nearer term, we expect a market recovery later this year, which should
strengthen progressively."
There will be a live presentation today at 10am at the offices of Peel Hunt
for analysts and investors, which will also be webcast live. The presentation
will be available for analysts and investors who are unable to view the
webcast live and can be accessed on Marshalls' website at www.marshalls.co.uk
(https://protect-eu.mimecast.com/s/zHWuCQnkphX8NoNHPS8Eb) . Users can register
to access the webcast using the following link:
https://brrmedia.news/MSLH_PR24 (https://brrmedia.news/MSLH_PR24)
Notes:
1. The results for the year ended December 2024 have been disclosed after adding
back adjusting items. These are set out in Note 4.
2. This Preliminary Announcement includes alternative performance measures
('APMs'), which are not defined or specified under the requirements of
International Financial Reporting Standards. The Board believes that these
APMs provide stakeholders with important additional information on the
Group. To support this, we have included an accounting policy note on APMs
in the Notes to this Preliminary Announcement, a glossary setting out the APMs
that we use, how we use them, an explanation of how they are calculated, and a
reconciliation of the APMs to the statutory results, where relevant. See
Notes 4 and 19 for further details.
Enquiries:
Matt Pullen Chief Executive Marshalls plc +44 (0)1422 314777
Justin Lockwood Chief Financial Officer
Simon Bourne Chief Commercial Officer
Mark Garraway Hudson Sandler +44 (0) 20 7796 4133
Harry Griffiths marshalls@hudsonsandler.com (mailto:marshalls@hudsonsandler.com)
Chief Executive's statement
Overview
As I reflect on my first year as Chief Executive of Marshalls, I am proud of
the Group's resilient financial performance in challenging market conditions
and am deeply grateful to all my colleagues for their hard work and
dedication. After completing a thorough strategy review, I am excited about
the significant medium-term growth opportunities ahead and was pleased to
launch the Group's 'Transform & Grow' strategy at the Capital Markets
Event last November.
Two of the Group's primary end markets, new housing and housing RMI, which
together account for around 70% of our revenues, continued to be challenging
during the year, with external market estimates of contractions of
approximately nine percent and three percent, respectively. Despite this, the
Group delivered a resilient performance, with an eight percent reduction in
revenue resulting in only a two percent decline in adjusted profit before
taxation. The reduction in revenue was partly mitigated by decisive actions
taken in 2023 to reduce capacity and costs by around £11 million, improved
manufacturing efficiency, and lower net finance expenses. Pleasingly, we also
reduced net debt through active working capital management, optimising capital
expenditure plans, and selling surplus assets. While the overall Group
performance was resilient, with notable success in our Roofing business and a
return to profit growth in Building Products, Marshalls Landscaping has
underperformed. We have taken steps to address this issue swiftly, as detailed
in the operational review that follows, and are confident that its performance
will improve.
In recent years, the Group has expanded its product offering, through both
acquisitions and organically, establishing a strong brand presence in
landscaping, roofing, water management and bricks. Our recently unveiled
'Transform & Grow' strategy will build on this at pace and further
diversify our sector exposure across new build housing, housing RMI,
infrastructure, commercial projects. Not only does sector diversification
offer protection against market fluctuations, it also enables the Group to
capitalise on opportunities arising from demand growth, investment and
regulatory tailwinds. Moreover, it will ensure that we will not be reliant on
any one operating segment.
We are excited about our growth prospects and the 'Transform & Grow'
strategy has identified several opportunities for market outperformance over
the medium-term underpinned by the Group's strong market positions, diverse
portfolio, operational leverage, and significant growth potential.
Operational review
Landscaping Products
Landscaping Products derives 44 per cent of its revenues from commercial &
infrastructure, 30 per cent from new housing and 26 per cent from housing
RMI. Revenues generated from all end markets contracted during the year,
with demand being particularly weak in new housing and housing RMI, and some
loss in market share. Revenue contraction of 17 per cent arose from a
combination of lower volumes, pricing pressure in the market and the disposal
of the Group's former Belgian subsidiary.
This business has underperformed and we have taken steps to improve its
commercial, operational and financial performance. The restructuring action
taken in 2023 was primarily centred on cost-base reductions and resulted in a
commercial organisational structure that was unable to deliver our national
specification driven model in an effective way. Having identified the core
issues, we implemented a comprehensive improvement plan in June 2024 focused
on:
· Strengthening leadership and realigning the organisation
· Developing commercial and operational excellence capabilities
· Portfolio simplification and operational efficiency
· Building long-term strategic customer and supplier partnerships
These actions are gaining traction and have resulted in a slowing in the rate
of revenue contraction in the second half of 2024. We are confident that
this plan will deliver a return to revenue growth during 2025 and a
progressive and significant improvement in profitability from 2026.
Building Products
Building Products generates 67 per cent of its revenues from new housing, 4
per cent from commercial & infrastructure, with the balance being derived
from housing RMI. Revenue reduced by three per cent driven by continued
weakness in new housing, with the second half performance being flat
year-on-year. Water Management revenue was flat year-on-year, with growing
volumes in commercial & infrastructure end markets offsetting contraction
in new housing. Revenue generated from our Bricks and Mortars business units
contracted year-on-year, but returned to modest growth in the second half of
the year, indicating some improvement in new housing activity levels.
Adjusted operating profit increased by 16 per cent in the year to £14.1
million.
Roofing Products
Approximately 47 per cent of revenues in this segment are generated from new
housing and around 42 per cent from housing RMI, with the balance generated
from commercial & infrastructure end markets. Revenue in 2024 increased
by four per cent for the year as a whole, with growth of 13 per cent in the
second half of the year. The improved second half performance was driven
principally by Viridian Solar, which delivered revenue growth of over 70 per
cent during this period, alongside a return to revenue growth from Marley.
Viridian Solar revenues grew as its market-leading products continued to be
chosen by housebuilders as part of their response to changes in building
regulations in England and Wales that require new housing to achieve higher
levels of energy efficiency. Adjusted operating profit for 2024 was £49.4
million, which represents an increase of 10%
'Transform & Grow' - a refreshed strategy to deliver growth
The Group's businesses are exposed to long-term growth drivers associated with
climate change including low carbon solutions, green urbanisation, and water
management and drainage. In the near-term, markets with structural and
regulatory tailwinds are expected to fuel revenue growth outperformance
including new housing, water infrastructure, energy transition and increased
public sector investment. The Group's businesses have enviable leadership
positions in their markets, strong differentiated brand propositions and
significant headroom for growth. The Group's customers value a unique set of
capabilities that are consistent across its businesses including:
· Leading brands - market-leading brands and solutions that are consistently
recognised for their quality, range and service.
· Best in class technical and design support - technical know-how and
understanding building standards of today and tomorrow provides unrivalled
expertise for our customers.
· Carbon leadership - a commitment to materials innovation and a nationwide
operational network supports the Group as a lower carbon supplier of choice.
The Group will continue to prioritise these areas supported by investing in
its people, business-wide enterprise excellence, and leadership in ESG
standards and governance.
The Group's portfolio of businesses comprises of its brand powerhouses;
Marshalls Landscaping and Marley Roofing, and its three growth engine
businesses; Viridian Solar, Marshalls Water Management and Marshalls Bricks
& Masonry. Under the 'Transform & Grow' strategy each business has
identified a core strategic imperative designed to deliver revenue growth that
outperforms the wider construction market and drives sustainable profitable
growth. The Group also operates regional mortars & screeds and
aggregates business units that are reported within our Building Products
reporting segment. They are integral parts of the Group's portfolio of
businesses and are expected to grow in-line with the wider construction
markets.
Marshalls Landscaping - Drive greater value from the distinctive national
specification pull model
This business has an enviable market leadership position with a balanced
exposure to end markets and is supported by a well invested manufacturing
operations network. Our strategy is focused on; reinforcing our strong
leadership position in our commercial heartlands, driving share in higher
margin commercial segments where there is headroom for growth, and
strengthening our proposition and driving share in residential segments. This
strategy will build on the near-term performance improvement plans that will
reinforce our winning model; with a clear focus on securing specification,
building long term customer partnerships, reinvigorating our market leading
product portfolio and optimising the efficiency of our nationwide
manufacturing network. The business is targeting revenue outperformance of the
wider market by between one and three per cent a year over the medium term.
Marley Roofing - Strengthen roofing heartlands and drive share in adjacencies
Marley is the market leader in pitched roofing. It has a balanced end market
exposure with a particular strength in social housing RMI and is supported by
a nationwide operations network. Strategies are being deployed to optimise
profit in its social housing heartland, drive market share in the larger
private housing RMI sector and leverage its unique full roof offer to increase
market share in private new housing. It will deliver this through building
on its brand position, investing in specification selling and quality
differentiation, supporting relationship building with roofing contractors,
and leveraging the solar roof system to meet housebuilder and public sector
housing needs. The business is targeting revenue outperformance of the wider
market by between one and two per cent a year.
Viridian Solar - Leverage energy transition tailwinds to accelerate growth
Viridian Solar is the market leader in integrated solar for pitched roofs and
principally supplies its products into new housing. Its products are widely
considered to be the best in class and customers value its market leading wrap
around service and its leadership in ESG. It is exposed to a significant
regulatory tailwind (part L of the Building Regulations) that is resulting in
take-up of solar PV in new housing, which is expected to increase the
penetration of solar in England and Wales from around 10 per cent to around 80
per cent. The business is targeting to hold significant market share, whilst
the market size increases alongside increasing sales of its innovative product
range. The business is targeting revenue outperformance of the wider market
by between eight and twelve per cent a year.
Marshalls Water Management - Reposition to access growth and market headroom
in water infrastructure
The business has a leading market position in residential wastewater and
surface water drainage with a nationwide operations network. It has a
significant opportunity to expand its customer base in the infrastructure
market, whilst building market penetration potential in the water sector where
investment under the AMP8 cycle is expected to increase by 50 per cent. The
business will achieve market penetration in the wastewater infrastructure
market and meet the needs of housebuilders for quality water management
solutions. It will deliver this through building the Marshalls brand in the
wastewater marketplace, investing in strategic marketing to specifiers as well
as investing in capacity and product extension. The business is targeting
revenue outperformance of the wider market by between four and six per cent a
year.
Marshalls Bricks & Masonry - Accelerate concrete adoption as lower carbon
alternative
This business is the market leader in lower carbon concrete bricks, has a wide
product range and nationwide coverage. It principally supplies its products
into new housing and has significant opportunity to increase its market share
alongside a cyclical recovery in housebuilding. The business will target
increased penetration of facing bricks into national housebuilders in new
regions and further grow its share through a targeted approach to regional
housebuilders. It will deliver this through brand investment, strategic
marketing, new product development, increased sales resource and investment in
the conversion of existing assets to manufacture concrete bricks. The
business is targeting revenue outperformance of the wider market by between
eight and twelve per cent a year.
ESG progress
The Group continues to make good progress on its carbon reduction journey, and
we have exceeded our Scope 1 and 2 absolute target for 2024 for the Marshalls
business. As we reported last year, the acquisition of Marley and the move of
our logistics to Wincanton resulted in a recalculation of our carbon reduction
targets. These revised targets have been validated by the Science Based
Targets initiative and we now have an overall Group target to reach net-zero
across all scopes by 2050. These targets include Scope 1, 2 and 3 emissions
and we will report Group progress next year.
Our 'Transform & Grow' strategy is clear on the priorities for our
business units in terms of demonstrating our carbon leadership. With a
commitment to materials innovation and a nationwide network, we are well
placed to offer our customers product solutions that contribute to a more
sustainable infrastructure. This is further supported by our expanding range
of Environmental Product Declarations ('EPDs') which give clear and
transparent information on the environmental impact of our products.
Financial review
Group results
The Group's adjusted results are set out in the following table.
£'m 2024 2023 Change (%)
Revenue 619.2 671.2 (8%)
Adjusted net operating costs (552.5) (600.5) 8%
Adjusted operating profit 66.7 70.7 (6%)
Adjusted net finance expenses (14.5) (17.4) 17%
Adjusted profit before taxation 52.2 53.3 (2%)
Adjusted taxation (11.7) (11.2) (4%)
Adjusted profit after taxation 40.5 42.1 (4%)
Adjusted EPS - pence 16.0p 16.7p (4%)
Proposed full-year dividend - pence 8.0p 8.3p (4%)
Group revenue was £619.2 million (2023: £671.2 million), which is eight per
cent lower than 2023. The key driver of the reduction was Landscaping
Products, which reported a 17 per cent reduction, with a slowing in the rate
of contraction during the second half of the year. Roofing Products
delivered four per cent growth, with a strong second-half performance and
Building Products contracted year-on-year by three per cent and was flat in
the second half. Group adjusted operating profit was £66.7 million, which
is six per cent lower than 2023, reflecting the impact of lower volumes and
weaker price over cost realisation. This was partially offset by the benefit
of cost savings from restructuring activity implemented in 2023 and improved
manufacturing efficiency. Group adjusted operating margin increased by 0.3
ppts to 10.8 per cent (2023: 10.5 per cent).
Net finance expenses were £14.5 million (2023: £18.8 million and £17.4
million after deducting adjusting items). These expenses comprised financing
costs associated with the Group's bank borrowings of £12.5 million (2023:
£14.7 million), IFRS 16 lease interest of £1.7 million (2023: £2.5 million)
and a pension related charge of £0.3 million (2023: £1.6 million and £0.2
million after deducting adjusting items). The reduction in adjusted net
finance expenses in 2024 reflects the impact of the lower drawn borrowings and
the derecognition of HGV leases under the logistics outsourcing arrangements
entered into in the first half of the year.
Adjusted profit before tax was £52.2 million (2023: £53.3 million). The
adjusted effective tax rate was 22 per cent (2023: 21 per cent), reflecting
the increase in the UK headline corporation tax rate partially offset by the
benefit of a patent box arrangement. Adjusted earnings per share was 16.0
pence (2023: 16.7 pence), which is a four per cent reduction year-on-year
reflecting the weaker profitability and higher effective tax rate.
A reconciliation of the Group's adjusted operating profit to profit before
taxation is set out in the following table.
£'m 2024 2023 Change (%)
Adjusted operating profit 66.7 70.7 (6%)
Adjusting items (12.8) (29.7) 57%
Operating profit 53.9 41.0 31%
Net finance expenses (14.5) (18.8) 23%
Profit before taxation 39.4 22.2 77%
EPS - pence 12.3p 7.4p 66%
Reported profit before tax was £12.8 million lower than the adjusted result
at £39.4 million (2023: £22.2 million), reflecting the impact of the
adjusting items. On a reported basis, the effective tax rate is 21 per
cent. Reported earnings per share was 12.3 pence (2023: 7.4 pence), which is
lower than the adjusted number due to the adjusting items and their tax
effect. The statutory operating profit is stated inclusive of adjusting
items totalling £12.8 million as summarised in the following table, further
details are set out at Note 4.
£'m 2024 2023
Amortisation of intangible assets arising on acquisitions 10.4 10.4
Transformation costs 2.5 -
Contingent consideration 1.6 1.6
Significant property sales (1.7) -
Impairment charges, restructuring costs and disposal of Marshalls NV - 17.7
Adjusting items within operating profit 12.8 29.7
Adjusting items within net finance expenses - 1.4
Adjusting items within profit before taxation 12.8 31.1
Adjusting items in 2024 principally comprise the non-cash amortisation of
intangible assets arising on the acquisition of subsidiary undertakings of
£10.4 million (2023: £10.4 million). Transformation costs represent costs
incurred in respect of the 'Transform & Grow' strategy. The
contingent consideration charge of £1.6 million reflects the Directors'
expectation for the final contingent consideration payment in respect of
Viridian Solar based on the strong performance of that business. This was
partially offset by a profit of £1.7 million generated on the disposal of a
former manufacturing site. Details of the adjusting items arising in 2023
are set out at Note 4.
Segmental performance
The adjusted operating profit is analysed between the Group's reporting
segments as follows:
£'m 2024 2023 Change (%)
Landscaping Products 10.7 21.3 (50%)
Building Products 14.1 12.2 16%
Roofing Products 49.4 44.9 10%
Central costs (7.5) (7.7) 3%
Adjusted operating profit 66.7 70.7 (6%)
Landscaping Products
Landscaping Products comprises the Group's Commercial and Domestic landscaping
business and Landscape Protection. The segment delivered revenue of £268.3
million (2023: £321.5 million) which represents a contraction of 17 per cent
compared to 2023. Revenue in 2023 included a £5 million contribution from
the Group's former Belgian subsidiary that was sold in April of that year.
£'m 2024 2023 Change (%)
Revenue 268.3 321.5 (17%)
Segment operating profit 10.7 21.3 (50%)
Segment operating margin % 4.0% 6.6% (2.6ppts)
Segment operating profit reduced by £10.6 million to £10.7 million. This
was driven by the combined effect of lower volumes on gross profit, weaker
price over cost realisation, and a reduction in the operational efficiency of
the manufacturing network due to lower production volumes. This was
partially offset by the benefit of cost savings of around £5 million arising
from the decisive action taken in 2023 to reduce capacity to align to market
demand and simplify operating structures. The fall in volumes together with
the impact of weaker trading margins resulted in segment operating margins
reducing by 2.6 ppts to 4.0 ppts for the year.
Building Products
Building Products comprises the Group's Water Management, Bricks &
Masonry, Mortars & Screeds and Aggregates businesses. Revenue in this
reporting segment reduced by three per cent year on year to £164.6 million.
£'m 2024 2023 Change (%)
Revenue 164.6 170.1 (3%)
Segment operating profit 14.1 12.2 16%
Segment operating margin % 8.6% 7.2% 1.4ppts
Segment operating profit increased by £1.9 million to £14.1 million, with a
much-improved result in the second half of the year. This profit growth was
driven by improved operational efficiency in Bricks & Masonry and Mortars
and Screeds, together with the benefit of actions taken in 2023 that reduced
the cost base by around £1.7 million. This was partially offset by lower
gross profit that resulted from weaker volumes in the first half of the
year. Segment operating margin increased by 1.4 ppts to 8.6 per cent
reflecting the impact of improved manufacturing efficiency.
Roofing Products
Roofing Products comprises pitched roofing products and accessories and roof
integrated solar. Revenue in this reporting segment increased by four per
cent year on year to £186.3 million.
£'m 2024 2023 Change (%)
Revenue 186.3 179.6 4%
Segment operating profit 49.4 44.9 10%
Segment operating margin % 26.5% 25.0% 1.5ppts
Segment operating profit was £49.4 million, which was £4.5 million higher
than 2023. This increase was driven by a strong performance from Viridian
Solar, which delivered significant revenue growth in the second half of the
year alongside a disciplined approach to price realisation. Marley
profitability remained robust during the year benefitting from a return to
volume growth in the second half of the year and strong cost management.
Segment operating margin was very strong at 26.5 per cent, representing a
year-on-year increase of 1.5 ppts.
Balance sheet, cash flow and funding
A summary of the Group's capital deployment and net assets is set out below.
£'m December December
2024 2023
Goodwill 324.4 324.4
Intangible assets 217.8 227.5
Property, plant & equipment and right-of-use assets 267.2 291.1
Net working capital 86.9 91.0
Net pension asset 24.1 11.0
Deferred tax (81.6) (84.1)
Other net balances (8.2) (2.0)
Total capital employed 830.6 858.9
Pre-IFRS 16 net debt (133.9) (172.9)
Leases (35.4) (44.7)
Net assets 661.3 641.3
Total capital employed at December 2024 was £830.6 million, which represents
a year on year reduction of £28.3 million. This reduction was due to the
impact of amortising intangible assets arising on acquisition, a reduction in
property plant and equipment arising from reduced capital expenditure, and
lower investment in net working capital balances. The reduction in net
working capital of £4.1 million was driven by effective credit account
management and an increase in trade creditors, partially offset by a decision
to increase inventories ahead of the expected recovery in market demand.
The balance sheet value of the Group's defined benefit pension scheme ('the
Scheme') was a surplus of £24.1 million (2023: £11.0 million). The amount
has been determined by the Scheme's pension adviser using appropriate
assumptions which are in line with current market expectations. The fair value
of the scheme assets at 31 December 2024 was £228.3 million (2023: £250.4
million) and the present value of the scheme liabilities is £204.2 million
(2023: £239.4 million). The total gain recorded in the Statement of
Comprehensive Income net of deferred taxation was £10.0 million (2023: £7.4
million loss). The principal driver of the actuarial gain was an increase in
AA corporate bond rate used to discount the scheme's liabilities at December
2024, which reduced the current value of the liabilities. The last formal
actuarial valuation of the defined benefit pension scheme was undertaken on 5
April 2021 and resulted in a surplus of £24.3 million, on a technical
provisions basis, which was a funding level of 107 per cent. A triennial
valuation as at 5 April 2024 is currently underway and, based on information
to date, the Company does not expect cash contributions to be payable
following its finalisation.
Adjusted return on capital employed ('ROCE') was broadly in-line with 2023 at
8.2 per cent (2023: 8.4 per cent). We expect adjusted ROCE to increase in
the medium term to around 15 per cent as volumes recover and we benefit from
operational leverage.
Operating cash flow conversion in 2024 was 106 per cent of adjusted EBITDA
(2023: 106 per cent) which demonstrates the consistently strong cash
generative nature of the Group's businesses. The proactive management of
working capital combined with the planned reduction in capital expenditure
resulted in a reduction in pre-IFRS16 net debt of £39.0 million in the period
to £133.9 million (2023: £172.9 million). The strong cash generation
during the year facilitated a £55 million reduction of the Group's term loan
to £155 million during the year, ensuring efficient management of borrowings
and net finance expenses. The Group's revolving credit facility of £160
million was undrawn at the year-end, which, together with the reduced term
loan, provides the Group with significant liquidity to fund its strategic and
operational plans. Following the £55 million reduction in the term loan,
the syndicated debt facility totals £315 million with the majority of it
maturing in April 2027. Net debt to EBITDA was 1.5 times at December 2024 on
an adjusted pre-IFRS 16 basis (2023: 1.9 times), which is within the Group's
target range of 0.5 times to 1.5 times. Headroom against the bank facility at
December 2024 was £160 million and all covenants were comfortably met at this
date.
Dividend
The Group maintains a dividend policy of distributions being covered twice by
adjusted earnings. The Board has proposed a final dividend of 5.4 pence per
share, which, taken together with the interim dividend of 2.6 pence per share,
would result in a pay-out in respect of 2024 of 8.0 pence (2023: 8.3 pence).
This is in-line with the Group policy and represents a year-on-year reduction
of four per cent, driven by weaker profitability and a higher effective
taxation rate. The dividend will be paid on 1 July 2025 to shareholders on
the register at the close of business on 6 June 2025. The shares will be
marked ex-dividend on 5 June 2025.
Outlook
The Board expects a market recovery later this year which should strengthen
progressively. This confidence is underpinned by the Government's ambition
to reinvigorate new house building and to invest in developing the nation's
infrastructure alongside further likely cuts to interest rates. The Group is
well-placed to leverage this recovery through its diverse portfolio of
businesses, as evidenced by the encouraging performances in Roofing and
Building Products which currently deliver 80 per cent of profits, and the
benefit of operational leverage.
This strength will be further bolstered by an improved performance in
Landscaping Products, profitable growth through the execution of the
'Transform & Grow' strategy, and capitalising on a market recovery. The
Group is well positioned to respond swiftly to improving activity levels as
key end markets recover and the Board remains confident about delivering a
material increase in profitability and returns over the medium-term.
Matt Pullen
Chief Executive
Condensed consolidated income statement
For the year ended 31 December 2024
Notes Audited Audited
Year ended Year ended December 2023
December
2024
£'m £'m
Revenue 2 619.2 671.2
Net operating costs 3 (565.3) (630.2)
Operating profit 2 53.9 41.0
Net finance expenses 5 (14.5) (18.8)
Profit before tax 39.4 22.2
Income tax expense 6 (8.4) (3.8)
Profit for the financial year 31.0 18.4
Profit for the year attributable to:
Equity shareholders of the Parent 31.0 18.6
Non-controlling interests - (0.2)
Profit for the financial year 31.0 18.4
Earnings per share
Basic 7 12.3p 7.4p
Diluted 7 12.2p 7.3p
Dividend
Proposed full year dividend - pence per share 8 8.0p 8.3p
A reconciliation of the Group's statutory results to the adjusted results is
set out below.
Audited Audited
Year ended Year ended December 2023
December
2024
Notes £'m £'m
Operating profit
Operating profit 53.9 41.0
Adjusting items 4 12.8 29.7
Adjusted operating profit 66.7 70.7
Profit before tax
Profit before tax 39.4 22.2
Adjusting items 4 12.8 31.1
Adjusted profit before tax 52.2 53.3
Profit after tax
Profit for the financial period 31.0 18.4
Adjusting items (net of tax) 4 9.5 23.7
Adjusted profit after tax 40.5 42.1
Earnings per share after adding back adjusting items
Basic 7 16.0p 16.7p
Diluted 7 16.0p 16.7p
Condensed consolidated statement of comprehensive income
For the year ended 31 December 2024
Audited Audited
Year ended Year ended December
December 2023
2024
Notes £'m £'m
Profit for the financial year 31.0 18.4
Other comprehensive income/(expense)
Items that will not be reclassified to the Income Statement:
Re-measurements of the net defined benefit surplus 13.4 (9.8)
Deferred tax arising (3.4) 2.4
Total items that will not be reclassified to the Income Statement 10.0 (7.4)
Items that are or may in the future be reclassified to the Income Statement:
Effective portion of changes in fair value of cash flow hedges 1.6 (0.6)
Fair value of cash flow hedges transferred to the Income Statement (2.4) (1.1)
Deferred tax arising 0.2 0.8
Reclassification on sale of subsidiary - (0.6)
Exchange difference on retranslation of foreign currency net investment 0.2 0.1
Exchange movements associated with borrowings designated as a hedge against - (0.2)
net investment
Total items that are or may be reclassified to the Income Statement (0.4) (1.6)
Other comprehensive income/(expense) for the year, net of income tax 9.6 (9.0)
Total comprehensive income for the year 40.6 9.4
Attributable to:
Equity shareholders of the Parent 40.6 10.2
Non-controlling interests - (0.8)
40.6 9.4
Condensed consolidated balance sheet
As at 31 December 2024
Audited Audited
December December
2024 2023
Notes £'m £'m
Assets
Non-current assets
Goodwill 9 324.4 324.4
Intangible assets 10 217.8 227.5
Property, plant and equipment 11 234.8 249.4
Right-of-use assets 32.4 41.7
Employee benefits 12 24.1 11.0
Deferred taxation assets 2.1 1.1
835.6 855.1
Current assets
Inventories 138.2 125.1
Trade and other receivables 80.8 93.4
Cash and cash equivalents 18.9 34.5
Assets classified as held for sale 1.5 2.4
Derivative financial instruments 1.1 1.9
Corporation tax - 1.7
240.5 259.0
Total assets 1,076.1 1,114.1
Liabilities
Current liabilities
Trade and other payables 132.1 127.5
Corporation tax 4.2 -
Lease liabilities 13 5.7 8.0
Provisions 6.6 3.0
148.6 138.5
Non-current liabilities
Lease liabilities 13 29.7 36.7
Interest-bearing loans and borrowings 14 152.8 207.4
Provisions - 5.0
Deferred taxation liabilities 83.7 85.2
266.2 334.3
Total liabilities 414.8 472.8
Net assets 661.3 641.3
Equity
Capital and reserves
Called-up share capital 63.2 63.2
Share premium & merger reserve 341.6 341.6
Capital redemption reserve & consolidation reserve (137.7) (137.7)
Other reserves 0.5 1.1
Retained earnings 393.7 373.1
Total equity 661.3 641.3
Condensed consolidated cash flow statement
For the year ended 31 December 2024
Audited Audited
Year ended Year ended
December December
2024 2023
Notes £'m £'m
Cash generated from operations 17 97.3 104.6
Finance expenses paid (11.7) (16.5)
Income tax paid (8.8) (10.4)
Net cash flow from operating activities 17 76.8 77.7
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 4.4 6.9
Financial income received - 0.1
Acquisition of subsidiary undertaking (2.6) (3.0)
Acquisition of property, plant and equipment (9.2) (18.3)
Acquisition of intangible assets (2.4) (2.5)
Cash outflow from sale of subsidiary - (1.4)
Net cash flow from investing activities (9.8) (18.2)
Cash flows from financing activities
Payments to acquire own shares (1.4) (0.3)
Repayment of borrowings (80.0) (84.4)
New loans 25.0 44.8
Cash payment for the principal portion of lease liabilities (5.3) (9.6)
Equity dividends paid (21.0) (31.6)
Net cash flow from financing activities (82.7) (81.1)
Net decrease) in cash and cash equivalents (15.7) (21.6)
Cash and cash equivalents at the beginning of the 34.5 56.3
year
Effect of exchange rate fluctuations 0.1 (0.2)
Cash and cash equivalents at the end of the year 18.9 34.5
Condensed consolidated statement of changes in equity
for the year ended 31 December 2024
Share capital Share premium & Capital redemption & Other reserves* Retained earnings Total
merger reserve
consolidation reserves
£'m £'m £'m £'m £'m £'m
At 1 January 2024 63.2 341.6 (137.7) 1.1 373.1 641.3
Total comprehensive
income/(expense) for the
period
Profit for the financial period - - - - 31.0 31.0
Other comprehensive
income/(expense)
Foreign currency - - - 0.2 - 0.2
translation differences
Reclassification on sale of - - - - - -
subsidiary
Effective portion of changes - - - 1.6 - 1.6
in fair value of cash flow
hedges
Net change in fair value of - - - (2.4) - (2.4)
cash flow hedges transferred
to the Income Statement
Deferred tax arising - - - 0.2 - 0.2
Defined benefit plan actuarial - - - - 13.4 13.4
gain
Deferred tax arising - - - - (3.4) (3.4)
Total other comprehensive - - - (0.4) 10.0 9.6
income/(expense)
Total comprehensive - - - (0.4) 41.0 40.6
income/(expense) for the
period
Transactions with owners
Share-based payments - - - - 1.8 1.8
Deferred tax on - - - - - -
share-based payments
Corporation tax on - - - - - -
share-based payments
Dividends to equity shareholders - - - - (21.0) (21.0)
Purchase of own shares - - - (1.4) - (1.4)
Own shares issued under - - - 1.2 (1.2) -
share scheme
Total contributions by and - - - (0.2) (20.4) (20.6)
distributions to owners
At 31 December 2024 63.2 341.6 (137.7) 0.5 393.7 661.3
Note*: Other reserves include own shares, hedging reserve and foreign exchange
reserve.
Condensed consolidated statement of changes in equity
for the year ended 31 December 2023
Share capital Share premium & Capital redemption & Other reserves* Retained earnings Total Non-controlling interests Total
merger reserve
consolidation reserves
equity
£'m £'m £'m £'m £'m £'m £'m £'m
At 1 January 2023 63.2 341.6 (137.7) 2.0 391.2 660.3 0.8 661.1
Total comprehensive
income/(expense) for the
period
Profit for the financial period - - - - 18.6 18.6 (0.2) 18.4
Other comprehensive
income/(expense)
Foreign currency - - - (0.1) - (0.1) - (0.1)
translation differences
Reclassification on sale of - - - 0.3 (0.3) - (0.6) (0.6)
subsidiary
Effective portion of changes - - - (0.6) - (0.6) - (0.6)
in fair value of cash flow
hedges
Net change in fair value of - - - (1.1) - (1.1) - (1.1)
cash flow hedges transferred
to the Income Statement
Deferred tax arising - - - 0.8 - 0.8 - 0.8
Defined benefit plan actuarial - - - - (9.8) (9.8) - (9.8)
loss
Deferred tax arising - - - - 2.4 2.4 - 2.4
Total other comprehensive - - - (0.7) (7.7) (8.4) (0.6) (9.0)
income/(expense)
Total comprehensive - - - (0.7) 10.9 10.2 (0.8) 9.4
income/(expense) for the
period
Transactions with owners
Share-based payments - - - - 2.8 2.8 - 2.8
Deferred tax on - - - - (0.1) (0.1) - (0.1)
share-based payments
Corporation tax on - - - - - - - -
share-based payments
Dividends to equity shareholders - - - - (31.6) (31.6) - (31.6)
Purchase of own shares - - - (0.3) - (0.3) - (0.3)
Own shares issued under - - - 0.1 (0.1) - - -
share scheme
Total contributions by and - - - (0.2) (29.0) (29.2) - (29.2)
distributions to owners
At 31 December 2023 63.2 341.6 (137.7) 1.1 373.1 641.3 - 641.3
Note*: Other reserves include own shares, hedging reserve and foreign exchange
reserve.
Notes to the condensed consolidated financial statements
For the year ended 31 December 2024
1. Basis of preparation
The condensed consolidated financial information, which comprises the income
statement, statement of comprehensive income, balance sheet, statement of
changes in equity, cash flow statement and related notes, is derived from the
Company's Financial Statements for the year ended 31 December 2024, which have
been prepared in accordance with International Financial Reporting Standards
("IFRS") and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. It does not constitute full Financial Statements with
the meaning of section 434 of the Companies Act 2006.
Statutory Financial Statements for 2023 have been delivered to the Registrar
of Companies and those for 2024 will be delivered following the Company's
Annual General Meeting. The auditor, Deloitte LLP, has reported on those
Financial Statements. The audit reports were unqualified, did not draw
attention to any matters by way of emphasis without qualifying the reports and
did not contain statements under Section 498(2) or (3) of the Companies Act
2006.
The accounting policies used in completing this financial information have
been applied consistently in all periods shown and are set out in detail in
the Annual Report for the year ended 31 December 2023 which can be found on
the Group's website (www.marshalls.co.uk (http://www.marshalls.co.uk) ).
The Group operates a formal risk management process, the details of which are
set out on page 52 of the Annual Report for the year ended 31 December 2023.
The risks assessed in preparing Preliminary Announcement are consistent with
those set out on pages 55 to 61 of the Annual Report and an update on those
risks is set out at Note 20 of this report.
Going concern
In assessing the appropriateness of the adopting the going concern basis in
the preparation of this Preliminary Announcement, the Board has considered the
Group's financial forecasts and its principal risks for a period of at least
twelve months from the date of this report. The forecasts included projected
profit and loss, balance sheet, cash flows, headroom against debt facilities
and covenant compliance. As noted above, the Group's principal risks are set
out in the 2023 Annual Report and Accounts and an update is included in this
report.
The financial forecasts have been stress tested in downside scenarios to
assess the impact on future profitability, cash flows, funding requirements
and covenant compliance. The scenarios comprise a more severe economic
downturn (which represents the Group's most significant risk) than that
included in the base case forecast, and a reverse stress test on our financial
forecasts to assess the extent to which an economic downturn would need to
impact on revenues in order to breach a covenant. This showed that revenue
would need to deteriorate significantly from the financial forecast and the
Directors have a reasonable expectation that it is unlikely to deteriorate to
this extent.
Details of the Group's funding position are set out in Note 14. The Group has
a syndicated bank facility of £315 million that principally matures in April
2027, having repaid £55 million of the original £370 facility during 2024.
At December 2024, £160 million of the facility was undrawn (2023: £160
million undrawn). There are two financial covenants in the bank facility
that are tested on a semi-annual basis and the Group maintains good cover
against these with pre-IFRS 16 net debt to EBITDA of 1.5 times (covenant
maximum of three times) and interest cover of 6.1 times (covenant minimum of
three times).
Taking these factors into account, the Board has the reasonable expectation
that the Group has adequate resources to continue in operation for the
foreseeable future (a period of at least twelve months) and for this reason,
the Board has adopted the going concern basis in preparing this Preliminary
Announcement.
Alternative performance measures and adjusting items
The Group uses alternative performance measures ("APMs") which are not defined
or specified under IFRS. The Group believes that these APMs, which are not
considered to be a substitute for IFRS measures, provide additional helpful
information. APMs are consistent with how business performance is planned,
reported and assessed internally by management and the Board and provide
additional comparative information. A glossary setting out the APMs that the
Board use, how they are used, an explanation of how they are calculated, and a
reconciliation of the APMs to the statutory results, where relevant is set out
at Note 19.
Adjusting items are items that are unusual because of their size, nature or
incidence and which the Directors consider should be disclosed separately to
enable a full understanding of the Group's results and to demonstrate the
Group's capacity to deliver dividends to shareholders. The adjusted results
should not be regarded as a complete picture of the Group's financial
performance, which is presented in the total results. Details of the
adjusting items are disclosed in Note 4 and Note 19.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of condensed consolidated financial statements requires the
Group to make estimates and judgements that affect the application of policies
and reported accounts. Critical judgements represent key decisions made by the
Board in the application of the Group accounting policies. Where a significant
risk of materially different outcomes exists due to the Board's assumptions or
sources of estimation uncertainty, this will represent a critical accounting
estimate. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates. The estimates and judgements which
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities are discussed below.
Critical accounting judgements
The following critical accounting judgements has been made in the preparation
of the condensed consolidated financial statements:
· As noted above, adjusting items have been highlighted separately due to their
size, nature or incidence to provide a full understanding of the Group's
results and to demonstrate the Group's capacity to deliver dividends to
shareholders. The determination of whether items merit treatment as an
adjusting item is a matter of judgement. Note 4 sets out details of the
adjusting items.
Sources of estimation uncertainty
The Directors consider the following to be key sources of estimation
uncertainty:
· In arriving at the accounting value of the Group's defined benefit pension
scheme, key assumptions have to be made in respect of factors including
discount rates and inflation rates. These are determined on the basis of
advice received from a qualified actuary. These estimates may be different
to the actual outcomes. See further information in Note 12.
· The carrying value of goodwill is reviewed on an annual basis in accordance
with IAS 36. This review requires the use of cash flow projections based on
a financial forecast that are discounted at an appropriate market-based
discount rate, and a long-term growth rate. The assumption on the
market-based discount rate is determined based on the advice of a third-party
advisor. The actual cash flows generated by the business may be different
to the estimates included in the forecasts. See further information in Note 9.
2. Segmental analysis
IFRS 8 "Operating Segments" requires operating segments to be identified on
the basis of discrete financial information about components of the Group that
are regularly reviewed by the Group's Chief Operating Decision Maker ('CODM')
to allocate resources to the segments and to assess their performance. The
CODM at Marshalls is the Board. The Group reports under three reporting
segments, namely Landscaping Products, Building Products and Roofing
Products. Landscaping Products comprises the Group's Public Sector and
Commercial and Domestic landscaping business and Landscape Protection.
Building Products comprises the Group's Water Management, Bricks and Masonry,
Mortars and Screeds and Aggregate businesses. Roofing Products comprises
Marley Roofing and Viridian Solar.
Segment revenues and operating profit
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Revenue
Landscaping Products 268.3 321.5
Building Products 164.6 170.1
Roofing Products 186.3 179.6
Revenue 619.2 671.2
Operating profit
Landscaping Products 10.7 21.3
Building Products 14.1 12.2
Roofing Products 49.4 44.9
Central costs (7.5) (7.7)
Segment operating profit 66.7 70.7
Adjusting items (see Note 4) (12.8) (29.7)
Reported operating profit 53.9 41.0
The Group has two customers which each contributed more than ten per cent of
total revenue in the current and prior year. The accounting policies of the
three operating segments are the same as the Group's accounting policies.
Segment profit represents the profit earned without allocation of certain
central administration costs that are not capable of allocation. Centrally
administered overhead costs that relate directly to the reportable segment are
included within the segment's results.
The geographical destination of revenue is the United Kingdom £617.8 million
(2023: £662.8 million) and Rest of the World £1.4 million (2023: £8.4
million).
Segment assets
Audited Audited
December December
2024 2023
£'m £'m
Segment assets
Landscaping Products 222.6 240.8
Building Products 142.2 142.0
Roofing Products 584.3 587.7
Unallocated assets 127.0 143.6
Total 1,076.1 1,114.1
For the purpose of monitoring segment performance and allocating resources
between segments, the Group's CODM monitors the property, plant and equipment,
right-of-use assets, intangible assets and inventory. Assets used jointly by
reportable segments are not allocated to individual reportable segments.
Capital additions
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Capital additions
Landscaping Products 21.2 23.1
Building Products 8.2 4.9
Roofing Products 3.8 5.9
Total 33.2 33.9
Capital additions comprise property, plant and equipment of £9.2 million
(2023: £16.5 million), right-of-use assets of £21.6 million (2023: £14.9
million) and intangible assets of £2.4 million (2023: £2.5 million).
Depreciation and amortisation
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Depreciation and amortisation
Landscaping Products 17.8 19.5
Building Products 8.0 8.0
Roofing Products 5.3 5.4
Segment depreciation and amortisation 31.1 32.9
Adjusting items 10.4 10.4
Depreciation and amortisation 41.5 43.3
Depreciation and amortisation includes £10.4 million of amortisation of
intangible assets arising from the purchase price allocation exercises (2023:
£10.4 million). This comprises £0.1 million (2023: £0.1 million) in
Landscaping Products, £1.1 million in Building Products (2023: £1.1 million)
and £9.2 million in Roofing Products (2023: £9.2 million). The amortisation
has been treated as an adjusting item (Note 4).
3. Net operating costs
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Raw materials and consumables 237.5 235.4
Changes in inventories of finished goods and work in progress (14.4) 12.9
Personnel costs 132.8 151.6
Depreciation of property, plant and equipment 22.1 21.4
Depreciation of right-of-use assets 7.3 9.8
Amortisation of intangible assets 12.1 12.1
Asset impairments - 7.3
Own work capitalised (1.3) (2.5)
Other operating costs 174.0 177.5
Redundancy and other costs - 9.3
Operating costs 570.1 634.8
Other operating income (2.9) (2.6)
Net gain on asset and property disposals (1.9) (1.4)
Net gain on disposal of subsidiary - (0.6)
Net operating costs 565.3 630.2
Adjusting items (Note 4) (12.8) (29.7)
Adjusted net operating costs 552.5 600.5
4. Adjusting items
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Amortisation of intangible assets arising on acquisitions 10.4 10.4
Transformation costs 2.5 -
Contingent consideration 1.6 1.6
Significant property sale (1.7) -
Restructuring and similar costs - 11.3
Impairment of property, plant and equipment - 7.0
Disposal of the former Belgian subsidiary - (0.6)
Total adjusting items within operating profit 12.8 29.7
Adjusting item in interest expense - 1.4
Total adjusting items before taxation 12.8 31.1
Current tax on adjusting items (Note 6) (0.7) (2.7)
Deferred tax on adjusting items (Note 6) (2.6) (4.7)
Total adjusting items after taxation 9.5 23.7
· Amortisation of intangible assets arising on acquisitions is principally in
respect of values recognised for the Marley brand and its customer
relationships.
· Transformation costs represent costs incurred in respect of the 'Transform
& Grow' strategy.
· The additional contingent consideration relates to the reassessment of the
amounts that will become payable to vendors arising in relation to Marley's
acquisition of Viridian Solar Limited in 2021.
· The profit generated on the sale of a significant property was in respect of
the Group's former manufacturing site in Carluke.
· Restructuring and similar costs arose during major restructuring exercises
conducted when the Group took steps to reduce manufacturing capacity and the
cost base in response to a reduction in market demand.
· The impairment of property, plant and equipment arose in connection with the
major restructuring exercises noted above.
· On 14 April 2023, the Group's interest in the former Belgian subsidiary was
sold for a nominal consideration. This consideration was higher than the net
carrying value on this date which resulted in a non-recurring profit of £0.6
million.
· The 2023 adjusting item in interest expense of £1.4 million is a non-cash
technical accounting charge arising from the resolution of certain historical
benefit issues. An allowance of £6.5 million was included in the net
pension scheme asset at December 2022 and following the resolution of the
benefit issues, this has been reduced to £5.5 million. This net reduction
of £1.0 million comprised a profit and loss account charge of £1.4 million
arising from the decision by the Board to not reduce pensions to payment to
certain pensioners who were receiving payments that are too high and £2.4
million credit to the condensed statement of comprehensive income relating to
adjustments to estimates.
5. Net finance expenses
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Net interest expense on bank loans 12.5 14.7
Interest expense of lease liabilities 1.7 2.5
Net interest expense on defined benefit pension scheme 0.3 0.2
14.5 17.4
Additional interest expense in defined benefit pension scheme - 1.4
Net finance expenses 14.5 18.8
Net interest expense on the defined benefit pension scheme is disclosed net of
Company recharges for scheme administration. The additional technical
interest expense in 2023 in respect of the defined benefit pension scheme
arose from the resolution of certain historical issues, was non-cash and
non-recurring. The Board decided to augment the benefits of certain
pensioners who would have otherwise suffered hardship due to a reduction in
pension payments following a review to correct the historical benefit
issues. This has augmentation charge was accounted for as an adjusting item
(see Note 4).
6. Income tax expense
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Current tax expense
Current year 13.7 8.8
Adjustments for prior years - (1.4)
13.7 7.4
Deferred taxation expense
Origination and reversal of temporary differences:
Current year (4.0) (3.0)
Adjustments for prior years (1.3) (0.6)
Total tax expense 8.4 3.8
Current tax on adjusting items (Note 4) 0.7 2.7
Deferred tax on adjusting items (Note 4) 2.6 4.7
Total tax expenses after adding back adjusting items 11.7 11.2
7. Earnings per share
Basic earnings per share from total operations of 12.3 pence (2023: 7.4 pence)
per share is calculated by dividing the profit attributable to Ordinary
Shareholders for the financial year, after adjusting for non-controlling
interests, of £31.0 million (2023: £18.6 million) by the weighted average
number of shares in issue during the period of 252,807,833 (2023:
252,824,077).
Basic earnings per share after adding back adjusting items of 16.0 pence
(2023: 16.7 pence) per share is calculated by dividing the adjusted profit
attributable to Ordinary Shareholders for the financial year, after adjusting
for non-controlling interests, of £40.5 million (2023: £42.3 million) by the
weighted average number of shares in issue during the period of 252,807,833
(2023: 252,824,077).
Profit attributable to Ordinary Shareholders
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Adjusted profit after tax 40.5 42.1
Adjusting items (9.5) (23.7)
Profit for the financial year 31.0 18.4
Profit attributable to non-controlling interests - 0.2
Profit attributable to Ordinary Shareholders 31.0 18.6
Weighted average number of Ordinary Shares
Audited Audited
year ended year ended
December December
2024 2023
Number Number
Number of issued Ordinary Shares 252,968,728 252,968,728
Effect of shares issued during the period - -
Effect of shares transferred into Employee Benefit Trust (160,895) (144,651)
Weighted average number of Ordinary Shares at the end of the year 252,807,833 252,824,077
Diluted earnings per share before adjusting items of 12.2 pence (2023: 7.3
pence) per share is calculated by dividing the profit for the financial
period, after adjusting for non-controlling interests of £31.0 million (2023:
£18.6 million), by the weighted average number of shares in issue during the
period of 252,807,833 (2023: 252,824,077), plus potentially dilutive shares of
999,738 (2023: 1,026,468), which totals 253,807,571 (2023: 253,850,545).
Diluted earnings per share after adding back adjusting items of 16.0 pence
(year ended 31 December 2023: 16.7 pence) per share is calculated by dividing
the profit for the financial period, after adjusting for non-controlling
interests of £40.5 million (2023: £42.3 million), by the weighted average
number of shares in issue during the period of 252,807,833 (2023:
252,824,077), plus potentially dilutive shares of 999,738 (2023: 1,026,468),
which totals 253,807,571 (2023: 253,850,545).
Weighted average number of Ordinary Shares (diluted)
Audited Audited
year ended year ended
December December
2024 2023
Number Number
Weighted average number of Ordinary Shares 252,807,833 252,824,077
Potentially dilutive shares 999,738 1,026,468
Weighted average number of Ordinary Shares (diluted) 253,807,571 253,850,545
8. Dividends
The Group maintains a dividend policy of distributions being covered twice by
adjusted earnings. The Board has proposed a final dividend of 5.4 pence per
share, which taken together with the interim dividend of 2.6 pence per share,
would result in a pay-out in respect of 2024 of 8.0 pence. This is in-line
with the Group policy and would represent a year-on-year reduction of four per
cent driven by weaker profitability and a higher effective taxation rate.
The dividend will be paid on 1 July 2025 to shareholders on the register at
the close of business on 6 June 2025. The shares will be marked ex-dividend on
5 June 2025.
9. Goodwill
Audited Audited
December December
2024 2023
£'m £'m
Net book value at start of period 324.4 322.6
Adjustments to purchase price allocation - 1.8
Net book value at end of period 324.4 324.4
All goodwill has arisen from business combinations. The carrying amount of
goodwill is allocated across cash generating units ("CGUs") which represent
the lowest level within the Group at which the associated goodwill is
monitored for management purposes and is consistent with the operating
segments set out in Note 2. The Group has three material CGUs, Landscaping
Products, Building Products and Roofing Products. The carrying amount of
goodwill has been allocated to CGUs as follows:
Audited December 2024 Audited December 2023
£'m £'m
Landscaping Products 34.8 34.8
Building Products 43.7 43.7
Roofing Products 245.9 245.9
324.4 324.4
Building Products and Landscaping Products
The recoverable amounts of the Building Products and Landscaping Products
segments as cash-generating units are determined based on value in use
calculations which use cash flow projections based on financial budgets
approved by the directors covering a five-year period and a post-tax discount
rate of 10.0 per cent per annum (2023: 10.4 per cent per annum). Cash flows
beyond that five-year period have been extrapolated using a 2.4 per cent
(2023: 2.4 per cent) per annum growth rate. This growth rate reflects
expectations of the long-term structural growth in demand for the segments'
products.
Roofing Products
The recoverable amount of the Roofing Products segment as a cash-generating
unit is determined based on a value in use calculation which uses cash flow
projections based on financial budgets approved by the directors covering a
five-year period and a post-tax discount rate of 10 per cent per annum (2023:
10.4 per cent per annum). Cash flows beyond that five-year period have been
extrapolated using a 2.4 per cent (2023: 2.4 per cent) per annum growth rate.
This growth rate reflects expectations of the long-term structural growth in
demand for the segment's products.
The compound annual growth rate ('CAGR') assumed within the Roofing Products
CGU five-year forecast is 9.1 per cent which reflects industry consensus with
respect to the future recovery in the construction materials market together
with management's expectations of future growth in residential solar PV as a
consequence of amendments made to building regulations in England and Wales.
Sensitivity analysis
The group has conducted an analysis of the sensitivity of the impairment test
to changes in the key assumptions used to determine the recoverable amount for
each of the group of CGUs to which goodwill is allocated. The directors
believe that any reasonably possible change in the key assumptions on which
the recoverable amounts of Building Products CGU are based would not cause the
aggregate carrying amounts to exceed the aggregate recoverable amounts.
At the end of the financial year, the recoverable amount of the Roofing
Products CGU exceeds the carrying amount by £77 million, which is lower than
the other CGUs given the recency of the acquisition, and consequently the
impairment review is more sensitive to changes in assumptions. The CAGR in the
Roofing Products CGU is particularly sensitive to future political and
regulatory decisions and the industry's interpretation of the most effective
solution to building regulation requirements regarding the use of
roof-integrated solar in new homes. These factors could affect growth rates
within the residential solar PV market and may have a corresponding impact on
profit margins. Changes in regulations regarding both the UK's ambitions for
the energy efficiency of residential properties and the specificity on how
they should be achieved represent reasonably possible downside risks that
could give rise to a future impairment charge. A CAGR of six per cent would
reduce the headroom in the Roofing Products CGU to nil.
The impairment review is also sensitive to changes in discount rate with an
increase of 100 basis points in the post-tax rate required to reduce headroom
in the Roofing Products CGU to nil, giving a breakeven point for the post-tax
rate of 11.0 per cent. A reduction in the long-term market growth rate to
0.9 per cent would eliminate the headroom of the Roofing Products CGU.
At the end of 2024, the recoverable amount in the Landscaping Products GCU was
£145 million higher than the carrying amount. The Board expects a
significant improvement in the performance of the Landscaping Products
reporting segment as a result of the comprehensive performance improvement
plan that was implemented from June 2024, the details of which are set out
elsewhere in this report, and the market consensus growth forecasts for the
sector. The combination of both of these assumptions is included within the
value in use of the Landscaping Products CGU and given the subjective nature
of these assumptions it is reasonably possible that both will not occur as the
directors forecast. However, it would require a reduction of around one third
of forecast cash flows before the value in use of the CGU exceeded the
recoverable amount.
10. Intangible assets
Audited Audited
December December
2024 2023
£'m £'m
Net book value at start of period 227.5 237.1
Additions 2.4 2.5
Amortisation (12.1) (12.1)
Net book value at end of period 217.8 227.5
Amortisation includes £10.4 million (2023: £10.4 million) relating to
intangible assets arising on acquisitions that is accounted for as an
adjusting item (see Note 4). Included in software additions is £1.0 million
(2023: £1.6 million) of own work capitalised.
11. Property, plant and equipment
Audited Audited
December December
2024 2023
£'m £'m
Net book value at start of period 249.4 266.5
Additions 9.2 16.5
Depreciation (22.1) (21.4)
Impairment - (7.3)
Other movements (1.7) (4.9)
Net book value at end of period 234.8 249.4
Impairment in 2023 represents the assets being written down to fair value less
cost to sell of £7.3 million in relation to major restructuring exercises at
certain facilities in the Group's network (see Note 4).
12. Retirement benefit asset
The amounts recognised in the balance sheet in respect of the defined benefit
asset are as follows:
Audited Audited
December December
2024 2023
£'m £'m
Present value of Scheme liabilities (204.2) (239.4)
Fair value of Scheme assets 228.3 250.4
Net amount recognised (before deferred tax) 24.1 11.0
The Company sponsors a funded defined benefit pension scheme in the UK (the
"Scheme"). The Scheme is administered within a trust which is legally separate
from the Company. The Trustee Board is appointed by both the Company and the
Scheme's membership and acts in the interest of the Scheme and all relevant
stakeholders, including the members and the Company. The Trustee is also
responsible for the investment of the Scheme's assets.
The Scheme provides pension and lump sums to members on retirement and to
dependants on death. The defined benefit section closed to future accrual of
benefits on 30 June 2006 with the active members becoming entitled to a
deferred pension. Members no longer pay contributions to the defined benefit
section. Company contributions to the defined benefit section after this date
are used to fund any deficit in the Scheme and the expenses associated with
administering the Scheme, as determined by regular actuarial valuations.
The Scheme poses a number of risks to the Company, for example longevity risk,
investment risk, interest rate risk, inflation risk and salary risk. The
Trustee is aware of these risks and uses various techniques to control them.
The Trustee has a number of internal control policies, including a Risk
Register, which are in place to manage and monitor the various risks it faces.
The Trustee's investment strategy incorporates the use of liability-driven
investments ("LDIs") to minimise sensitivity of the actuarial funding position
to movements in interest rates and inflation rates.
The defined benefit section of the Scheme is subject to regular actuarial
valuations, which are usually carried out every three years. An actuarial
valuation is being carried out with an effective date of 5 April 2024 and is
expected to be concluded shortly. These actuarial valuations are carried out
in accordance with the requirements of the Pensions Act 2004 and so include
deliberate margins for prudence. This contrasts with these accounting
disclosures which are determined using best estimate assumptions. The last
formal actuarial valuation was carried out as at 5 April 2021 which resulted
in a surplus of £24.3 million, on a technical provisions basis. A triennial
valuation as at 5 April 2024 is currently underway and, based on information
to date, the Company does not expect cash contributions to be payable
following its finalisation.
The charge recognised in the income statement in respect of the Scheme is
included in net finance expenses and totalled £0.3 million in the year ended
December 2024 (2023: £1.6 million). Net interest expense on the defined
benefit pension scheme is disclosed net of Company recharges for scheme
administration. In the year ended December 2023, this expense included a
one-off, non-cash, technical accounting charge of £1.4 million relating to
the resolution of a review into historical benefit issues. This charge was
accounted for as an adjusting item, see Notes 4 and 5 for further details.
13. Lease liabilities
Audited Audited
December December
2024 2023
£'m £'m
Analysed as:
Amounts due for settlement within twelve months 5.7 8.0
Amounts due for settlement after twelve months 29.7 36.7
35.4 44.7
The interest expense on lease liabilities amounted to £1.7 million (2023:
£2.5 million). Lease liabilities are calculated at the present value of the
lease payments that are not paid at the commencement date. For the year
ended December 2024, the average effective borrowing rate was 5.0 per cent
(2023: 4.2 per cent). Interest rates are fixed at the contract date. All
leases are on a fixed repayment basis and no arrangements have been entered
into for contingent rental payments.
The total cash outflow in relation to leases amounts to £7.0 million (2023:
£11.6 million). The total cash outflow in relation to short-term and low
value leases was £2.7 million (2023: £7.1 million).
14. Interest bearing loans and borrowings
Audited Audited
December December
2024 2023
£'m £'m
Analysed as:
Non-current liabilities 152.8 207.4
Interest bearing loans and borrowings are stated net of unamortised debt
arrangement fees of £2.2 million (2023: £2.6 million).
The total syndicated bank facility at December 2024 was £315.0 million (2023:
£370.0 million), of which £160 million (2023: £160 million) remained
unutilised. The Group repaid £55 million of the term loan during 2024, which
reduced the total facility to £315 million. This provides significant
liquidity for the Group to fund its strategic and operational plans going
forward. The undrawn facility available at December 2024 expires between two
and five years.
The Group's committed bank facilities are charged at variable rates based on
SONIA plus a margin. The Group's bank facility continues to be aligned with
the current strategy to ensure that headroom against the available facility
remains at appropriate levels and are structured to provide committed
medium-term debt.
Marshalls has a receivables purchase agreement with a UK bank and is party to
a reverse factoring finance arrangement between a UK bank and one of the
Group's key customers (the principal relationship is between the customer and
its partner bank). Under these agreements, Marshalls has the option of
transferring the ownership of certain customer receivables to the bank or to
receive advance payment of approved invoices from the key customer,
respectively. Utilising either agreement results in the derecognition of
receivables from the Group's balance sheet. The Group utilises these
facilities periodically in order to help manage its short-term funding
requirements and pays a finance charge upon utilisation.
15. Analysis of net debt
Audited Audited
December December
2024 2023
£'m £'m
Cash at bank and in hand 18.9 34.5
Debt due after 1 year (152.8) (207.4)
Lease liabilities (35.4) (44.7)
Net debt (169.3) (217.6)
16. Reconciliation of net cash flow to movement in net debt
Audited Audited
December December
2024 2023
£'m £'m
Net decrease in cash equivalents (15.7) (20.3)
Cash outflow from movement in bank borrowings 55.0 39.8
On disposal of subsidiary undertakings - (1.4)
Cash outflow from lease repayments 5.3 9.6
New leases entered into (20.4) (13.7)
Lease liability de-recognised 24.4 5.3
Effect of exchange rate fluctuations (0.3) (0.3)
Movement in net debt in the year 48.3 19.0
Net debt at beginning of the year (217.6) (236.6)
Net debt at end of the year (169.3) (217.6)
The lease liability derecognition was in respect of vehicle leases that were
novated as part of a logistics outsourcing project.
17. Reconciliation of profit after taxation to cash generated
from operating activities
Audited Audited
year ended year ended
December December
2024 2023
Notes £'m £'m
Profit after taxation 31.0 18.4
Income tax expense on continuing operations 6 8.4 3.8
Profit before tax 39.4 22.2
Adjustments for:
Depreciation of property, plant and equipment 11 22.1 21.4
Asset impairments - 7.3
Depreciation of right-of-use assets 7.3 9.8
Amortisation 10 12.1 12.1
Gain on disposal of subsidiary - (0.6)
Gain on sale of property, plant and equipment (1.9) (1.4)
Equity settled share-based payments 1.1 2.8
Net finance expenses 5 14.5 18.8
Operating cash flow before changes in working capital 94.6 92.4
Decrease in trade and other receivables 13.8 25.8
(Increase) / decrease in inventories (13.1) 10.1
Increase / (decrease) in trade and other payables 2.0 (23.7)
Cash generated from operations 97.3 104.6
18. Fair values of financial assets and financial liabilities
A comparison by category of the book values and fair values of the financial
assets and liabilities of the Group at 31 December 2024 is shown below:
Book value Fair value
Audited Audited Audited Audited
December December December December
2024 2023 2024 2023
£'m £'m £'m £'m
Trade and other receivables 76.1 87.5 76.1 87.5
Cash and cash equivalents 18.9 34.5 18.9 34.5
Bank loans (152.8) (207.4) (146.1) (202.2)
Trade payables, other payables and provisions (122.8) (116.8) (122.8) (116.8)
Derivatives 1.1 1.9 1.1 1.9
Contingent consideration (6.6) (8.0) (6.6) (8.0)
Financial instrument assets and liabilities - net (186.1) (208.3)
Non-financial instrument assets and liabilities - net 847.4 849.6
Net assets 661.3 641.3
Estimation of fair values
The following summarises the major methods and assumptions used in estimating
the fair values of financial instruments reflected in the table. Other than
contingent consideration, which uses a level three basis, all use level two
valuation techniques.
(a) Derivatives
Derivative contracts are either marked to market using listed market prices or
by discounting the contractual forward price at the relevant rate and
deducting the current spot rate. For interest rate swaps, broker quotes are
used.
(b) Interest-bearing loans and borrowings
Fair value is calculated based on the expected future principal and interest
cash flows discounted at the market rate of interest at the balance sheet
date.
(c) Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the
notional amount is deemed to reflect the fair value. All other
receivables/payables are discounted to determine the fair value.
(d) Contingent consideration
The contingent consideration has been calculated based on the Group's
expectation of what it will pay in relation to the post-acquisition
performance of the acquired entities.
(e) Fair value hierarchy
The table below analyses financial instruments, measured at fair value, into a
fair value hierarchy based on the valuation techniques used to determine fair
value.
· Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities.
· Level 2: inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
£'m £'m £'m £'m
December 2024
Derivative financial assets - 1.1 - 1.1
Contingent consideration - - (6.6) (6.6)
- 1.1 (6.6) (5.5)
December 2023
Derivative financial assets - 1.9 - 1.9
Contingent consideration - - (8.0) (8.0)
- 1.9 (8.0) (6.1)
19. Alternative performance measures
The APMs set out by the group are made-up of earnings-based measures and ratio
measures with a selection of these measures being stated after adjusting
items.
Measures stated after excluding adjusting items
These performance measures are calculated using either the associated
statutory measure or alternative performance measure after adding back the
adjusting items detailed in Note 4. The Group's accounting policy on adjusting
items is set out in Note 1, basis of preparation.
APM Definition and/or purpose
Adjusted operating profit, adjusted profit before tax, adjusted profit after The Directors assess the performance of the Group using these measures
tax, adjusted earnings per share, adjusted EBITA, adjusted EBITDA and adjusted including when considering dividend payments.
operating cash flow
Adjusted return on capital employed Adjusted return on capital employed is calculated as adjusted EBITA (on
annualised basis) divided by shareholders' funds plus net debt at the period
end. It is designed to give further information about the returns being
generated by the Group as a proportion of capital employed.
Adjusted operating cash flow conversion Operating cash flow conversion is calculated by dividing adjusted operating
cash flow by adjusted EBITDA (both on an annualised basis). Adjusted
operating cash flow is calculated by adding back adjusting items paid, net
finance expenses paid, and taxation paid. It illustrates the rate of
conversion of profitability into cash flow.
Pre-IFRS 16 measures
The Group's banking covenants are assessed on a pre-IFRS 16 basis. In order to
provide transparency and clarity regarding how the Group's compliance with
banking covenants, the following performance measures and their calculations
have been presented:
APM Definition and purpose
Pre-IFRS 16 adjusted EBITDA Pre-IFRS 16 adjusted EBITDA is adjusted EBITDA excluding right-of-use asset
depreciation and profit or losses on the sale of property, plant and
equipment.
Pre-IFRS 16 net debt Pre-IFRS 16 net debt comprises cash at bank and in hand and bank loans but
excludes lease liabilities. It shows the overall net indebtedness of the
Group on a pre-IFRS 16 basis.
Pre-IFRS 16 net debt leverage This is calculated by dividing pre-IFRS 16 net debt by adjusted pre-IFRS 16
EBITDA (on an annualised basis) to provide a measure of leverage.
Other definitions
APM Definition and purpose
EBITDA EBITDA is earnings before interest, taxation, depreciation, and amortisation
and provides users with further information about the profitability of the
business before financing costs, taxation, and non-cash charges.
EBITA EBITA is earnings before interest, taxation and amortisation and provides
users with further information about the profitability of the business before
financing costs, taxation, and amortisation.
Reconciliations of IFRS reported income statement measures to income statement
APMs is set out in the following three tables. A reconciliation of operating
profit to pre-IFRS 16 adjusted EBITDA is set out below:
Audited Audited
year ended year ended
December December
2024 2023
£'m £'m
Operating profit 53.9 41.0
Adjusting items (Note 4) 12.8 29.7
Adjusted operating profit 66.7 70.7
Amortisation (excluding amortisation of intangible assets arising on 1.7 1.7
acquisitions)
Adjusted EBITA 68.4 72.4
Depreciation 29.4 31.2
Adjusted EBITDA 97.8 103.6
Profit on sale of property, plant and equipment (0.2) (1.4)
Right-of-use asset principal payments (5.3) (9.6)
Pre-IFRS 16 adjusted EBITDA 92.3 92.6
Disclosures required under IFRS are referred to as on a reported basis.
Disclosures referred after adding back adjusting items basis are restated and
are used to provide additional information and a more detailed understanding
of the Group's results.
Pre-IFRS 16 net debt and pre-IFRS 16 net debt leverage
Net debt comprises cash at bank and in hand, bank loans and leasing
liabilities. An analysis of net debt is provided in Note 15. Net debt on a
pre-IFRS 16 basis has been disclosed to provide additional information and to
align with reporting required for the Group's banking covenants. Pre-IFRS 16
net debt leverage is defined as pre-IFRS 16 net debt divided by adjusted
pre-IFRS16 EBITDA. Net debt as reported in Note 15 is reconciled to pre-IFRS
16 net debt and pre-IFRS 16 net debt leverage below:
Audited Audited
December December
2024 2023
£'m £'m
Net debt 169.3 217.6
IFRS 16 leases (35.4) (44.7)
Net debt on a pre-IFRS 16 basis 133.9 172.9
Adjusted pre-IFRS 16 EBITDA 92.3 92.6
Pre-IFRS 16 net debt leverage 1.5 1.9
Return on capital employed ('ROCE')
ROCE is defined as adjusted EBITA divided by shareholders' funds plus net
debt.
Audited Audited
December December
2024 2023
£'m £'m
Adjusted EBITA 68.4 72.4
Shareholders' funds 661.3 641.3
Net debt 169.3 217.6
Capital employed 830.6 858.9
ROCE 8.2% 8.4%
Adjusted operating cash flow conversion
Adjusted operating cash flow conversion is the ratio of adjusted operating
cash flow to adjusted EBITDA and is calculated as set out below:
Audited Audited
year ended year ended
December December
2024 2023
£'m £m
Net cash flow from operating activities 76.8 77.7
Adjusting items paid 6.4 5.5
Net finance expenses paid 11.7 16.5
Taxation paid 8.8 10.4
Adjusted operating cash flow 103.7 110.1
Adjusted EBITDA 97.8 103.6
Adjusted operating cash flow conversion 106% 106%
20. Principal risks and uncertainties
Risk management is the responsibility of the Marshalls plc Board and is a key
factor in the delivery of the Group's strategic objectives. The Board
establishes the culture of effective risk management and is responsible for
maintaining appropriate systems and controls. The Board sets the risk appetite
and determines the policies and procedures that are put in place to mitigate
exposure to risks. The Board plays a central role in the Group's Risk Review
process, which covers emerging risks and incorporates scenario planning and
detailed stress testing.
There continue to be external risks and significant volatility in UK and world
markets with high and persistent levels of cost inflation and an uncertain
outlook. In an addition to the macro-economic environment, the key risks for
the Group are cyber security, competitor activity and an increased focus in
climate change and other ESG related issues. In all these cases, specific
assessments continue to be reviewed, certain new operating procedures have
been implemented and mitigating controls continue to be reviewed as
appropriate. A summary of these risks is set out below.
· Macro-economic uncertainty - The Group is dependent on the level of activity
in its end markets. Accordingly, it is susceptible to economic downturn, the
impact of Government policy, changes in interest rates, the increasing impact
of wider geo-political factors (including ongoing conflicts and changes to
trade tariffs arrangements) and volatility in world markets. The Group closely
monitors trends and lead indicators, invests in market research and is an
active member of the Construction Products Association. The Group's response
to macro-economic uncertainty has been a major focus during the period
including continuing to control costs, working capital tightly whilst
maintaining flexibility to increase production when markets start to recover,
and maintain a vigilant approach to credit management.
· Cyber security - the risk of a cyber security attack continues to increase
with more incidents being reported in UK businesses. In response, the Group
has a risk-based approach to the continued development of our cyber security
controls, including immutable back-ups, alongside procuring cyber insurance.
· Competitor activity - It has been challenging to recover input cost inflation
through higher selling prices due to weaker demand levels resulting in
heightened competition for volumes in the marketplace and not all input costs
were covered by price increases in 2024. In order to protect profitability,
the Group is focusing on controlling its cost base and the attributes that are
important to our customers, including best in class technical and design
support, carbon leadership and our leading brands.
· Climate change and other ESG issues - to ensure the effective management of
all relevant risks and opportunities. The Group remains committed to full
transparency for all stakeholders and the Group's sustainability objectives
remain core to the Group's business model and strategy. The Group employs
experienced, dedicated staff to support our ESG agenda.
The other principal risks and uncertainties that could impact the business for
the remainder of the current financial year are those set out in the 2023
Annual Report and Accounts on pages 55 to 61. These cover the strategic,
financial and operational risks and have not changed significantly during the
period. Strategic risks include those relating to the ongoing Government
policy, general economic conditions, the actions of customers, suppliers and
competitors, and weather conditions. The Group also continues to be subject to
various financial risks in relation to the pension scheme, principally the
volatility of the discount (AA corporate bond) rate, any downturn in the
performance of equities and increases in the longevity of members. The other
main financial risks arising from the Group's financial instruments are
liquidity risk, interest rate risk, credit risk and foreign currency risk.
External operational risks include the cyber security and information
technology, the effect of legislation or other regulatory actions and new
business strategies.
The Group continues to monitor all these risks and pursue policies that take
account of, and mitigate, the risks where possible.
21. Annual General Meeting
The Annual General Meeting will be held at the offices of Walker Morris, 33
Wellington Street, Leeds, West Yorkshire, LS1 4DL at 11.00 am on 14 May 2025.
Board members
The Directors serving during the year ended 31 December 2024 and up to the
date of this report were as follows:
Vanda Murray OBE Chair
Simon Bourne Chief Operating Officer
Angela Bromfield Non-Executive Director
Martyn Coffey Former Chief Executive (resigned 29 February 2024)
Avis Darzins Non-Executive Director
Diana Houghton Non-Executive Director
Justin Lockwood Chief Financial Officer
Graham Prothero Senior Non-Executive Director
Matt Pullen Chief Executive (appointed 8 January 2024)
By order of the Board
Shiv Sibal
Group Company Secretary
17 March 2025
Cautionary Statement
This Preliminary Results announcement contains certain forward-looking
statements with respect to the financial condition, results, operations and
business of Marshalls plc. These statements and forecasts involve risk and
uncertainty because they relate to events and depend upon circumstances that
will occur in the future. There are a number of factors that could cause
actual results or developments to differ materially from those expressed or
implied by these forward-looking statements and forecasts. Nothing in this
Preliminary Results announcement should be construed as a profit forecast.
Directors' Liability
Neither the Company nor the Directors accept any liability to any person in
relation to the contents of this Preliminary Results announcement except to
the extent that such liability arises under English law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue or
misleading statement or omission shall be determined in accordance with
section 90A of the Financial Services and Market Act 2020.
Shareholder Information
Financial calendar
Report and accounts for the year ended December 2024 3 April 2025
Annual General Meeting 14 May 2025
Final dividend for the year ended December 2024 (subject to shareholder 1 July 2025
approval)
Results for the half year ending June 2025 Early August 2025
Results for the year ending December 2025 Early March 2026
Registrars
All administrative enquiries relating to shareholdings should, in the first
instance, be directed to Computershare Investor Services PLC, PO Box 82, The
Pavilions, Bridgwater Road, Bristol BS99 6ZZ (telephone: 0870 707 1134) and
should clearly state the registered shareholder's name and address.
Dividend mandate
Any shareholder wishing dividends to be paid directly into a bank or building
society should contact the Registrars for a dividend mandate form. Dividends
paid in this way will be paid through the Bankers' Automated Clearing System
("BACS").
Website
The Group has a website that gives information on the Group and its products
and provides details of significant Group announcements. The address is
www.marshalls.co.uk (http://www.marshalls.co.uk) .
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