Fresh landscape: Marshalls financials climb past pre-pandemic levels
The financials at landscaping products group Marshalls have begun to surpass pre-pandemic levels, after the group watched operating profits collapse amid lockdown last year.
Revenue hit £298.1m in the six months to 30 June, inching past the £280.1m it recorded in 2019. The group posted a profit before tax of £38.9m as it again surpassed its pre-pandemic figures.
Shares lifted 2.25 per cent to 773.5p per share in the firm’s early trading.
Marshalls was struck hard by the pandemic, which left it with a profit before tax of just £1.3m and a statutory operating loss of £14.2m in the first half of 2020.
Since 2020’s lows, the group’s statutory profits have climbed to £41m in its half-year trading results published today.
Workforce shortages
The improved financials has chief executive Martyn Coffey feeling positive about the second half of the year, as he told City PM that despite a number of headwinds, the company has forecast revenue growth of six per cent for the full year.
The pandemic has left Marshalls grappling with both HGV driver shortages and the so-called ‘pingdemic’, which has rattled supply chains across the country.
“We’ve had 10 to 15 per cent of the workforce out of our factories and our logistics” as a result of being pinged by the Covid-19 app, Coffey said.
Meanwhile, “the availability of drivers has been a big issue,” the boss added, noting that the company has been able to circumvent a lot of its impacts as it has its own fleet of drivers.
The shortage of lorry drivers has prompted the company to start training its own – which the boss said had been easy to fill with many people looking for daytime positions.
Pent-up demand
Sales in Marshalls’ domestic market was the “stand-out performer”, the company said in a statement – as spending on patios and driveways held up momentum.
“The demand is unprecedented,” Coffey added. “This is the best construction market I’ve ever seen.”
Domestic sales were up 54 per cent on 2020 levels, and also showed 17 per cent growth on levels seen prior to the pandemic.
The company said that UK homeowners will have to wait over 21 weeks to upgrade their outside spaces, with domestic installer order books hitting record levels.
Investments
Coffey explained that although market conditions are supportive, in light of the pandemic-induced supply chain struggles which have hit businesses across the globe – there remain “inflationary pressures across the sector.”
However, the boss added that the group has been “encouraged by the continuing strength in demand and the positive trading environment” which has bolstered the board’s confidence of making further progress throughout the rest of the year and 2022.
“This year we’ll invest hopefully £30m, which is the most we’ve invested as a company. That’s a critical part of our growth factor,” Coffey said, as it gives the firm an edge both in terms of its products and logistics.
The company, which makes block paving, has recently injected some £20m into a dual block plant to produce twice the number of slabs its other plants make.
A typical Marshalls block plant would create 48 blocks every 10 seconds, but its latest dual block plant based in St Ives, Cambridgeshire will produce 96 blocks every 10 seconds.