Marshalls (MSLH) swung to a loss in the first half of 2020, as £17.6m-worth of restructuring costs weighed on the income statement. The shake-up is expected to reduce the landscape product supplier’s fixed costs by around £12m a year.
Just over two-thirds of sales are sourced from the public sector and commercial end-markets, which together trailed 28 per cent behind the same period last year. However, management is optimistic that new work can be secured with public bodies, especially as the UK government brings forward £5bn worth of capital investment projects.
Revenues in the domestic end market fared a little better, but were still down 24 per cent. Sales have started to rebound since May, as more customers picked up DIY projects within the home, while domestic installer order books ticked up to 11.9 weeks, compared to 10.7 weeks in February.
Overall there have been some signs that trade is recovering, with sales in August flat against the same period last year. But a rough first half meant that Marshalls was pushed to secure an extra £90m of short term bank facilities, as well as the government's Covid Corporate Financing Facility (‘CCFF’) - for £200m, no less.
Broker Numis forecasts adjusted earnings of 6.2p per share 2020, rising to 20.8p in 2021.
| MARSHALLS (MSLH) | ||||
| ORD PRICE: | 669p | MARKET VALUE: | £1.34bn | |
| TOUCH: | 667-671p | 12-MONTH HIGH: | 876p | LOW: 520p |
| DIVIDEND YIELD: | NIL | PE RATIO: | N/A | |
| NET ASSET VALUE: | 137p* | NET DEBT: | 36% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 280 | 37.1 | 15.18 | 4.70 |
| 2020 | 210 | -16.0 | -7.25 | nil |
| % change | -25 | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| *Includes intangible assets of £96m or 48p a share | ||||
