Marshalls has been reasonably successful in adjusting its business model to cope with the economic downturn, but there was very little it could do to mitigate the effects of the wettest second quarter on record. This caused the building materials group's underlying operating profit of £13.7m in the first half last year to slump by 30 per cent to £9.5m and that's before accounting for £11.9m of asset impairments and £6.6m of closure and restructuring costs, which led to the hefty reported loss in our table.
Much of the fall in revenue came from the UK domestic end market, which accounts for a third of group turnover and where sales fell 14 per cent. Management reckons that the record rainfall hit sales by around £10m, and it is not clear how much of this has been weather delayed or lost forever. More encouragingly, commercial and public sector work - accounting for 62 per cent of group turnover - proved more resilient and sales here fell just 2 per cent. The group's start-up business in Belgium is performing well, too, contributing 5 per cent of group turnover, with sales up 24 per cent in the first half.
Numis is forecasting full-year pre-tax profits of £10.5m and EPS of 4.6p (£13.7m and 6.3p in 2011), recovering to £14.2m and 6.1p, respectively, in 2013.
| MARSHALLS (MSLH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 80p | MARKET VALUE: | £158m | |
| TOUCH: | 79-81p | 12-MONTH HIGH: | 104p | LOW: 76p |
| DIVIDEND YIELD: | 6.6% | PE RATIO: | NA | |
| NET ASSET VALUE: | 89p* | NET DEBT: | 47% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 177 | 12.2 | 5.47 | 1.75 |
| 2012 | 167 | -10.8 | -3.82 | 1.75 |
| % change | -6 | - | - | - |
Ex-div: 24 Oct Payment: 7 Dec *Includes intangible assets of £41.6m, or 21p a share | ||||
