The growing popularity of pedestrianisation schemes and the need to fight terrorism are helping to boost sales at Marshalls.
Marshalls, the specialist landscape products group, today revealed that it had achieved revenue growth over the last half year, despite Brexit uncertainty.
In the half year ended June 30 2019, Marshalls delivered revenue growth of 15 per cent to £280.1 million and trading since the period end has remained strong.
Martyn Coffey, the chief executive, said there was a trend towards pedestrianisation in UK cities, which was helping to improve Marshalls' performance.
He said Marshalls had been involved in paving areas around the Trinity and Victoria Gate shopping centres in Leeds. He said the company was receiving a boost from policies aimed at keeping traffic out of city centres around Britain.
The group has also reported strong demand for its anti-terrorist street furniture. Recent events have raised awareness of the vital role that barriers and other street furniture can play in preventing terrorist attacks and this is a rapidly growing area for the firm.
Marshalls has focused on terrorist prevention furniture that blends into the background, such as seaters or planters, rather than barriers. The group’s street furniture has steel rods enforced with concrete.
Mr Coffey said the firm's anti-terrorism furniture was helping to protect universities and major public buildings in the US.
"People are concerned about vehicles being used as weapons,'' he said.
With regards to Brexit, Mr Coffey said that any form of political indecision was not good for business.
Marshalls said it would continue to focus on organic growth and investment, with capital expenditure of £23 million planned for 2019.
The company has also devised a five year strategy to help it achieve sustainable growth.
The Elland-based firm said there would be an increase in research and development activity and new product development to boost sales.
The plan will also see Marshalls continuing to target selective bolt-on acquisition opportunities in the new build housing, water management and minerals sectors.
Mr Coffey said: “The group continues to outperform the Construction Products Association’s (“CPA”) growth figures, despite ongoing political and Brexit uncertainty.
"The CPA’s recent summer forecast predicts a decrease in UK market volumes of 0.3 per cent in 2019, followed by an increase of 1.0 per cent in 2020, while the underlying indicators in the new build housing, road, rail and water management markets remain supportive.
"Post period-end trading has remained strong. The board believes that the group’s new five year business strategy will continue to deliver sustainable growth, whilst maintaining a strong balance sheet and a flexible capital structure. The strategy is underpinned by strong market positions, focused investment plans and an established brand. The board is increasingly confident of at least achieving its expectations for 2019.”
Reported operating profit increased to £39 million, from £33.5 million in the same period last year. Edenhall, which was acquired in December 2018, has continued to trade strongly and its integration is in line with the company's expectations, the statement added.
Marshalls has produced half-year results which are marginally better than expected, according to analysts at Numis.
In a note, Numis said “In our view this is a solid performance, with the group showing 7.5 per cent organic growth.
“Whilst this is slower than the 13 per cent reported in the first four months of the year, last year’s figures were flattered by the inclement weather in March/April 2018, and June this year was impacted by the weather.
“Importantly Marshalls points to “strong trading” post period end, and we think the group is trending above our forecast for 5 per cent organic growth for the full-year.
“ In our view this is a good performance and well ahead of the CPA’s estimate of a 0.3 per cent decline in construction activity in 2019.
The note from Numis added: “We think this reflects Marshalls’ alignment to the better performing parts of the construction economy, but also continued market share gains and self-help investment.”