Landscaping group Marshalls’ share price jumped up by as much as six per cent in early trading as the builders’ merchants and garden centre supplier reported bumper profits in its 2016 full-year results.
Profits before tax rose by 31 per cent to £46m from £35.3m last year on flat revenues of £396.9m, up three per cent from £386.2m.
Basic earnings per share increased by 32 per cent to 18.95p and the company declared a final dividend of 5.8p per share, up by 22 per cent.
Marshalls increased net cash to £5.4m from a net debt of £11.5m last year.
Why it’s interesting
The company has delivered significant profit growth in 2016 and says its underlying indicators remain supportive in its main end markets.
Marshalls said it will make bolt-on acquisitions a key part of its strategy, funded by operational cash flow and bank loans. This will pave the way for further growth prospects without needing to tap investors for more cash.
Stockbroker Panmure Gordon said the results “provide a fantastic reminder why Marshalls is one of our top picks within the construction materials space”.
It said the firm delivers “market share gains”, “margin expansion”, “consistent cash generation” and rewards shareholders with ordinary and supplementary dividends.
What Marshalls said
Martyn Coffey, chief executive, said: “Marshalls has a strong balance sheet and the group's innovative product range and strong market positions mean it is well placed to deliver continued growth and operational profit improvements as it implements its 2020 strategy.
“Sales and order intake have been strong in the first couple of months of 2017.”
Marshalls has delivered a strong set of results with profits increasing by 21 per cent on flat revenues and has moved to a net cash position of £5.4m from a net debt of £11.5m.