Our paving stone tip delivers rock solid growth of 185% in two and a half years
THE UK construction industry is in rude health and is scheduled to grow by more than 17 per cent over the next four years.
Its renaissance has been a shot in the arm for paving and stone specialist Marshalls. Midas recommended the shares in April 2013 at 124p. Today, the stock is riding high at 353½p and brokers believe the best is yet to come.
Founded in the 1890s, Marshalls’ stone covers the forecourts of the renovated Liverpool Lime Street and London St Pancras stations, as well as pavements, roads, buildings and drives across Britain.
Marshalls also leads the way with innovative products, such as permeable paving to improve drainage in towns prone to flooding.
The firm is even working on ‘smart’ bollards, which interact with mobile phones, telling tourists where they are in a city and giving details of local attractions.
Under new chief executive Martyn Coffey, Marshalls has made impressive progress. In the first six months of this year, turnover rose 11 per cent to £199million, while profit soared 48 per cent to £20.8million and the half-year dividend increased 13 per cent to 2.25p.
Analysts predict a 51 per cent rise in full-year profit to £34million and a 13 per cent rise in the full-year dividend to 6.8p. In the next few years, Marshalls should benefit as the Treasury increases spending on projects such as Crossrail and HS2, and Britain’s roads. The group also has a small, thriving international division, focused on the Middle East and US.
Midas verdict: Marshalls has come a long way in the past two years but the shares still have plenty of potential. Coffey is clear-sighted and determined to deliver growth. In today’s turbulent markets, shareholders should hold on to this stock as a long-term winner.