Paving firm builds for future

MARSHALLS exemplifies the type of plucky, smart-thinking British company that appeals to Schroders British Opportunities Trust.

Founded in the late 1900s, the group specialises in products for outdoor spaces, from garden paths and household drives to pavements, bollards and kerbs on the street.

A leader in its field, Marshalls is based in Elland, West Yorkshire, but operates across the country. Commercial projects include a new look for New Bond Street i n London, public benches and even motorway drainage.

Residential projects vary from helping to create new housing developments to natural stoneware for individual homes.

In early March, the company reported solid figures, a 15 per cent increase in the dividend and a special, one-off payment too. Then

Covid-19 struck, the UK went into lockdown and construction came to a standstill. Staff were furloughed, chief executive Martin Coffey cancelled the final and special dividends and he took a 20 per cent pay cut alongside other board members. Profits plummeted over the spring and the shares sank.

Today, however, the picture is very different. Last week, Coffey reported that Marshalls has bounced back. In the four months to October 31, sales returned to 2019 levels and in October alone, revenues were 5 per cent higher than last year.

Growth has been particularly strong in the domestic market. Households, stuck at home for months, have embarked on refurbishment projects inside and out.

Marshalls has benefited as gardens and driveways have been upgraded and the group’s order book now stretches well into next year. Construction work has been exempted from current lockdown restrictions so growth has continued apace in recent weeks.

The company has repaid its furlough money and directors who took pay cuts have donated that money, equivalent to £120,000, to Macmillan Cancer Support and

Mind, both charities that have been having a hard time raising money in recent months.

Coffey is hopeful that the company will exceed market forecasts in 2021 and a 2020 dividend may now be forthcoming too, payable next summer.

Brokers believe that sales and profits will be lower this year than last but they should recover over the next two years and beyond.

A dividend of 12p is forecast for 2021, rising to 18p in 2022, with continued growth expected thereafter.

Traded on: Main market Ticker: MSLH Contact: marshalls.co.uk or 01422 312000