Operational gearing played a big part in Marshalls' (MSLH) strong performance in 2016. So whereas revenue edged ahead by 3 per cent, operating profit jumped by 27 per cent to £47.6m. This puts it well on the way to achieving its five-year plan to 2020 of boosting operating margins and the return on capital; the latter rose from 19 per cent to 23 per cent while operating margins were up from 9.7 per cent to 12 per cent. And once again, shareholders were rewarded with a special dividend payment.
Marshalls manufactures and supplies such items as paving slabs, patio and drainage products, and around one-third of group sales turnover is generated in the domestic market, where sales grew by 10 per cent. However, sales to the public sector and commercial end market - two-thirds of group sales - were broadly in line with the previous year, although Marshalls managed to increase its market share. And while conditions in Europe remained subdued, revenue grew by 2 per cent, with international sales now accounting for around 5 per cent of group turnover.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to December 2017 of £49.5m and EPS of 20.3p (from £46m and 18.8p in 2016).
| MARSHALLS (MSLH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 335.8p | MARKET VALUE: | £662m | |
| TOUCH: | 335.1-335.9p | 12-MONTH HIGH: | 355p | LOW: 199p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 109p** | NET CASH: | £5.4m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
|---|---|---|---|---|
| 2012 | 301 | -12.2 | -3.3 | 5.25 |
| 2013 | 307 | 13.0 | 6.9 | 5.25 |
| 2014 | 359 | 22.4 | 10.1 | 6.0 |
| 2015 | 386 | 35.3 | 14.3 | 7.0 |
| 2016 | 397 | 46.0 | 19.0 | 8.7 |
| % change | +3 | +31 | +32 | +24 |
Ex-div: 15 Jun Payment: 30 Jun *Not including special dividends of 2p a share in 2015 and 3p in 2016 **Includes intangible assets of £40m, or 20p a share | ||||
