Marshalls (MSLH) H2 2024 earnings summary

Executive summary

• 2024 was a transformative year, marked by the launch of a new 'transform and grow' strategy focused on strengthening core brands and investing in growth engines.

• Delivered resilient performance in 2024, with Roofing and Building Products segments contributing 80% of profits, while landscaping underperformed but is undergoing an improvement plan.

• The group realigned to a business unit-led model, invested in leadership, and prioritized customer-centricity amid weak markets.

• Disciplined working capital management led to a £39m reduction in net debt and improved leverage to 1.5x EBITDA.

• The group is positioned to benefit from market recovery and execution of the 'Transform & Grow' strategy.

Financial highlights

• Group revenue fell 8% year-over-year to £619.2 million, mainly due to continued weakness in new housing and private housing RMI.

• Adjusted operating profit dropped 6% to £66.7 million; adjusted PBT down 2% to £52.2 million.

• Adjusted basic EPS decreased 4% to 16p; proposed full year dividend of 8.0p, down 4%.

• Net debt reduced by £39 million to £133.9 million, with leverage at 1.5x EBITDA.

• Group operating margin improved by 0.3 points to 10.8%.

Outlook and guidance

• Market recovery is expected later in 2025, with further strengthening into 2026, supported by government initiatives and potential base rate cuts.

• Landscaping is forecast to return to revenue growth in 2025 and significant profit growth in 2026.

• Medium-term group operating margin target is at least 15%.

• CapEx for 2025 expected at the lower end of £20–30 million range.

• No significant net debt reduction expected in 2025 due to working capital and CapEx needs; deleveraging to resume from 2026.