Marshalls: Yorkshire firm says Labour's housebuilding plans can help boost its business
Shares in Elland-based building, roofing and landscape manufacturer Marshalls have been boosted after the firm said the new Government’s housebuilding plans can bolster its business.
Shares in the company were up 10 per cent in Wednesday morning trading despite its latest trading update recording a £47m drop in revenues in its latest figures.
The company’s trading update for the first nine months of 2024 recorded group revenue of £476 million, compared to £528 million in the same period of 2023.
But the firm said performance has been improving in recent months, with group revenue during the third quarter of 2024 three per cent down on 2023.
It said this was a “material improvement” on the first half of the year, where there was a 12 per cent like-for-like reduction in sales.
The group is to host a ‘Capital Markets Event’ in November in which it will outline where it sees medium-term growth opportunities – a position the company says has been assisted by the new Government’s approach to housebuilding.
Its update said: “The ongoing review of the Group's strategy has identified a number of opportunities to deliver relative outperformance over the medium term.
"These include an increased focus on attractive sustainability-driven markets across bricks and masonry, water management and energy transition alongside the expected cyclical recovery in the core landscape and roofing businesses, supported by the impact of the Government's commitment to increase housebuilding significantly.
"In anticipation of a continued improving demand environment for the Group's products, the board expects that profit for the full year will be in line with its previous expectations and that pre-IFRS16 net debt will be modestly better than its previous expectations.”
Labour have proposed changes to the country’s National Planning Policy Framework, including upping a target for new homes to 370,000 per year from a previous 300,000. Local councils will also need to provide five years of land supply and maintain a pipeline for development.
Marshalls said in its trading update that it has a “robust” balance sheet, with pre-IFRS16 net debt reduced in the third quarter to £149 million “driven by continued focus on cash management”.
The company’s trading statement to the London Stock Exchange said: “Net debt is therefore £41 million lower than the prior year, reflecting strong organic cash generation and a continued focus on cash management.
"The Group repaid a further £25 million of its term loan in early October 2024 to optimise its financing costs and, following this payment, the outstanding balance is £155 million.”