Investment Case
Priorities for capital
Data for year ending 31st December 2023.
Organic growth
Capital investment remains core to strategic growth.
Delivery over the last 4 years
2020
2021
2022
2023
R&D and new product development
- Continued focus on R&D and NPD
Delivery over the last 4 years
2020
2021
2022
2023
Ordinary dividends
Maintaining dividend cover of two times adjusted earnings
Delivery over the last 4 years
2020
2021
2022
2023
Balance sheet leveraging
Target to redce net debt to around one times adjusted EBITDA by December 2025
Delivery over the last 4 years
2020
2021
2022
2023
Selective acquisitions
Target selective bolt-on acquisition opportunities
Delivery over the last 4 years
2020
2021
2022
2023
Strong business fundamentals
- Diversified product offering with exposure to strong, long-term growth markets across varied construction sectors
- Reputable brand proposition across hard landscaping, roofing, water drainage and concrete walling products.
- Market leading positions in landscaping and roofing; significant growth opportunities in intergrated solar, water management products and lower-carbon concrete bricks
- Excellent manufacturing footprint across the UK with a well invested asset base
Focused growth strategy
- Credible strategic goal to become the UK's leading manufacturer of sustainable solutions for the built environment
- Delivered PBT CAGR of 24 per cent between 2013 and 2022, before 2023 market downturn
- Product and service innovation with demand generation strategy for project specificatios, drive customers to Marshalls and Marley solutions
- Continued investment in facilities and technology to improve efficiencies and broaden the product range
- Combination of organic growth supplemented by complementary transactions to deliver sustained through-cycle growth
ESG market leadership
- Sector leader in sustainability for over 20 years
- First in the UK construction materials sector to obtain approved science-based targets for carbon reduction
- Creating better places through the core pillars of "better product, better workplace and better world"
- Trend towards increased ESG, weighting in customer procurement decision making
- Commitment to net zero and new carbon reduction targets for enlarged Marshalls Group submitted to the Science Based Targets ("SBTi) initiative for validation
Robust risk management
- Formal process to identify, analyse and assess current and emerging risks with active engagement from the Executive Team and Board
- Mitigating controls continually monitored by management
- Controls periodically audited by external parties
- Detailed active plans developed for identified risks
Well positioned for a recovery in our markets
- Flexible cost base and manufacturing sites provide management with optionality to right-size the business
- Significant operational capacity to satisfy increased demand
- Operating margins expected to benefit from high operational leverage when volumes improve with market recovery, with a medium-term target of 15 per cent
Focus on driving shareholder value
- Long-term track record of generating shareholder returns - total of £217 million dividends paid in ten years between 2014 and 2023
- Opportunity to deliver progressive earnings growth and adjusted ROCE of 15 per cent over the medium term
- Cash generative business model with a strong balance sheet with a well-defined capital allocation policy
- Focus on driving organic growth, supplemented by periodic, complementary bolt-on acquisitions
- Sustainable, through-cycle dividend policy, targeting 2x cover by adjusted earnings