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FTSE 250: Marshalls revenue up 17% to £348.4m

·3-min read
Builders work on a new Barratt Homes housing development near Warrington, Britain, August 6, 2020. REUTERS/Phil Noble
Marshalls said the outlook for commercial construction demand in the second half of 2022 remains positive. Photo: Phil Noble/Reuters

Marshalls (MSLH.L) reported a 17% increase in revenue in its interim report on Thursday, with the construction firm's profits elevated by a "transformational" acquisition of concrete roof tile maker Marley Group.

Against stern macro-economic headwinds, brought on by rising inflation and global supply chain woes due to Russia's invasion of Ukraine and coronavirus resurgence in China, the firm saw a pre-tax profit of £44.6m ($53.69m).

Marshalls said: “The effects of wider economic and geopolitical uncertainty and volatility, including the effect of the conflict in Ukraine on global supply chains, are continually being assessed.

“In addition, the impact that increasing cost inflation and further increases in interest rates might have on consumer demand is a particular risk currently.”

Read more: Tax cuts in doubt amid high inflation and strained public finances

Marshalls half-year results for 2022 showed revenue of £348.4m, an increase of £50.3m when compared to revenue of £298.1m in the first half of 2021.

The construction and landscape products manufacturer saw an adjusted pre-tax profit for the first half of 2022 of £44.6m. This was a £5.1m — or 13% — rise compared to the first half of 2021, when pre-tax profit stood at £39.5m.

Marshalls was trading at 449.40p, down 5.80p, or 1.27% in London on Thursday.

The company announced its acquisition of pitched roof systems supplier Marley Group plc on 29 April 2022, for £535m.

This diversification will enlarge Marshalls' coverage of the construction market sub-sector in concrete roof tiles, according to the company.

Martyn Coffey, 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 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.

Read more: FTSE 100 and European stocks lower as inflation fears grip investors

“Our strategy is underpinned by our strong market positions, established brands and focused investment plans to drive ongoing operational improvement.

"We remain confident this will continue to deliver profitable long‑term growth.”

Marshalls said the outlook for commercial construction demand in the second half of 2022 remains positive.

The report stated that the Construction Product Association’s (CPA) recent summer forecast predicts growth in total construction output of 2.5% in 2022 and 1.6% in 2023.

However, it also said that demand for private housing repairs maintenance and improvements is expected to soften in the second half of 2022.

Private housing repairs and maintenance improvements represent 20% to 25% of the firm's revenues.

The concrete manufacturer is also incorporating CarbonCure into its production processes as it strives to become a carbon-neutral operator.

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CarbonCure is a climate tech company offering a range of technological methods that reduce and remove carbon dioxide across the concrete manufacturing process.

The technology injects CO2 from the atmosphere directly into concrete as it is being mixed.

The CO2 immediately reacts with the cement during the mixing process and mineralises to create calcium carbonate.

Once the CO2 is mineralised, it is permanently locked into the concrete for thousands of years, even if the concrete is demolished.

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