(MSLH) Marshalls Group

Trading Update: 6 January 2012

Current trading in line with expectations

Marshalls' revenue for the year ended 31 December 2011 increased by 8 per cent to £334 million (2010: £309 million).

Sales to the Public Sector and Commercial end market, which represent approximately 60 per cent of Marshalls' sales, were up 9 per cent and sales to the Domestic end market including Domestic International sales, on a continuing basis, were up by 7 per cent compared to the prior year.  Sales into International end markets grew from 1 per cent to 3 per cent of Group sales.

Cash management remains a central priority with a continuing focus on capital expenditure, stock control and the management of monetary working capital.  The Group, however, continues to invest for the medium term.  In 2011 Marshalls expanded its International interests and made a capital expenditure and working capital investment of approximately £8 million.  As a result net debt at 31 December 2011 was £77 million (2010: £67 million).

Outlook

Sales remained encouraging in the final quarter of 2011 despite the uncertainty that prevailed at the macro economic level. The Group continues to develop sales initiatives including targeted marketing and product innovation in the Public Sector and Commercial end market, installer initiatives and distributor merchandising in the Domestic end market, and specialist landscape products into selected International end markets.

In the Public Sector and Commercial end market there continues to be reasonable visibility of demand for the first half of 2012 with continuing strength in Commercial offsetting weakness in Public Sector.

In the Domestic end market volumes remain subdued against a background of low consumer confidence. The survey of domestic installer order books at the end of October 2011 showed 7.8 weeks (2010: 8.1 weeks) compared with 7.0 weeks at the end of June 2011. 

Commenting on this Trading Update, Graham Holden, Chief Executive, said:

"Marshalls has a solid asset underpin with good operational and financial flexibility.  Selective investment in new products and services and in new markets and growth opportunities is being balanced with careful cost management.  As these sales figures show, our initiatives are delivering additional sales and this creates confidence for the future".

The next update will be the Preliminary Results announcement on Friday 9 March 2012.

Enquiries:

6 January 2012

Note to the Editor:

About Marshalls:

Established in the late 1880s, Marshalls is the UK's leading manufacturer of superior natural stone and innovative concrete hard landscaping products, supplying the construction, home improvement and landscape markets.  Marshalls provides the product ranges, design services, technical expertise, innovative ideas and inspiration to transform gardens, drives and public and commercial landscapes.

Marshalls operates its own quarries and manufacturing, including a national network of manufacturing and distribution sites throughout the UK.  As a major plc, Marshalls is committed to quality in everything it does, including the achievement of environmental and ethical best practice and continual improvement in health and safety performance.

Forward-Looking Statements:

Any statements in this release, to the extent that they are forward-looking, are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the markets in which Marshalls operates.  It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated.  More information about the factors that may affect Marshalls' performance is contained in the Annual Report to shareholders for the year ended 31 December 2010.