Marshalls in talks over £19m sale of aggregate quarries

Graham Holden, chief executive of Marshalls, said that the aggregate quarries are “non-core activities” and that the sum raised from their sale would initially be used to reduce borrowings, meaning that the firm’s balance sheet is stronger.

The quarries that would be affected are the group’s freehold and leasehold quarries at Clearwell, Gloucestershire, and its sand and gravel quarries located at Dunsville, near Hatfield, South Yorkshire, Astley Moss in Greater Manchester and Mold in North Wales.

These quarries currently supply aggregate materials to the construction sector, including materials used by Marshalls. Marshalls also has an aggregate quarry at Maltby, in South Yorkshire, which it is not selling.

Marshalls said it will retain all of its dimensional stone quarries, some of which produce aggregate as an ancillary product.

Mr Holden said: “Marshalls has been a niche player in the UK aggregates market for a number of years and, while the business is profitable, it remains ancillary to the core operations where our growth focus lies.”

Marshalls said it expects to sell the quarries for a cash consideration on completion of £17.5m, with a final consideration of up to £19m, depending on certain conditions.

Yesterday, Breedon Aggregates said it had conditionally raised £61m through a share placing to fund acquisitions, including the proposed deal with Marshalls. Marshalls said that the talks also envisage commercial arrangements for the continued supply of materials to its manufacturing sites.

Marshalls fell into the red in 2012, as wet weather and the weak economy forced a costly overhaul. A £21.5m restructuring charge pushed the group to an £11.2m pre-tax loss in 2012, versus £13.7m profits a year earlier. Revenues fell to £309.7m from £334.1m. Net debt fell 18 per cent to £63.5m.

Marshalls said that as of December 31, 2012, the value of the gross assets it plans to sell was £14.9m. The operating profit generated from the operations carried on at these quarries was £1.1m in 2012, based on an annual turnover of £10m, of which £8.8m came from sales outside the group.