Marshalls (MSLH) H2 2023 earnings summary

Executive summary

• Weak construction markets reduced 2023 revenue and profitability; cost, capacity and cash actions strengthened resilience ahead of a potential recovery.

• Marley acquisition broadened exposure to less discretionary RMI and integrated solar, while the Belgian business was exited.

• Medium-term priorities include margin recovery, growth from climate-related solutions, disciplined investment and progressive deleveraging.

Financial highlights

• Revenue £671.2m, down 7% reported; like-for-like revenue contracted 13%.

• Adjusted operating profit £70.7m, down 30%; adjusted EBITDA £103.6m, down 24%.

• Adjusted PBT £53.3m, down 41%, after adding back £31.1m of adjusting items; adjusted EPS 16.7p, down 47%.

• Statutory operating profit £41.0m, PBT £22.2m and basic EPS 7.4p; proposed final dividend 5.7p per share, down 42%.

Outlook and guidance

• Near-term markets remain challenging; management expects medium-term outperformance as markets recover and structural under-investment supports demand.

• Illustrative scenario: 10% volume growth could lift adjusted operating margin by 200bps and PBT by 50%; 20% growth could lift margin by 400bps and double PBT.

• 2024 capex planned at £15m–£20m; medium-term targets include ~15% operating margin, ~15% ROCE and 85%–90% EBITDA conversion to operating cash flow.

• Medium-term segment margin targets: at least 15% for Landscape Products and 15% for Building Products; Marley margins expected in the 20%–25% range.