Marshalls confirms quarries sale deal

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PAVING slabs specialist Marshalls yesterday agreed to sell four quarries in a deal worth up to £19m with Breedon Aggregates.

The sites include sand and gravel quarries at Dunsville, near Hatfield, South Yorkshire, Astley Moss in Greater Manchester and Mold in North Wales, as well as the Clearwell limestone quarry in the Forest of Dean, which supplies the construction industry as well as the DIY market, including materials for walls and gravel for drives.

Marshalls announced the proposed deal earlier in the week, confirming it yesterday.

Breedon is paying an initial £17.5m for the sites, which will add 13 million tonnes of mineral reserves to its portfolio. The final consideration is expected to be up to £19m, depending on certain conditions.

Following the deal, which is subject to shareholder approval, Breedon will have 37 quarries and hold 400 million tonnes of mineral reserves. This week, Breedon Aggregates said it had conditionally raised £61m through a share placing to fund acquisitions, including the deal with Marshalls.

Huddersfield-based Marshalls said it has been a niche player in the aggregates market for a number of years and that the operations were ancillary to its core operations.

Marshalls also has an aggregate quarry at Maltby, in South Yorkshire, which it is not selling.

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

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 is selling 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.