Marshalls plc (MSLH) Earnings Call Transcript & Summary

Hello, and welcome, everyone. I am Vanda Murray, Chair of the Marshalls' Board, and I'll be chairing our Annual General Meeting today. According to the attendance report, we have a quorum present, and I have pleasure in declaring the meeting open. We've taken steps to make this meeting as accessible as possible to as many shareholders as we can. While respecting the government's guidelines on social distancing and public gatherings. And I'm pleased to be able to extend a warm welcome to our shareholders who are participating online through our virtual meeting platform. Our Board members are participating in this meeting online, and I can confirm that the Chief Executive, Martyn Coffey is present, as are my fellow nonexecutive directors; Janet Ashdown, Graham Prothero, Angela Bromfield and Tim Pile. Hopefully, the ability to see the Board, albeit virtually is a welcome addition this year. Ahead of the formal business, I would like to remind you that Janet Ashdown will retire from the Board at the end of the meeting. And I would like to reiterate my thanks to Janet for her enormous contribution to the Board and for her unstinting commitment during her tenure. All of the agenda items are fully explained in my letter of 1st of April 2020, which accompanies the notice of meeting. The notice was published on the company's website and was sent or made available to shareholders in accordance with their instructions. I therefore propose to take it as read. The resolutions were listed in the form of proxy, and I do not propose to summarize them again before we commence the formal voting process. We will once again be conducting the voting by way of a poll. I will be taking any questions that you may have about the annual report in general and any of the resolutions first. But I would like to take a few moments to explain the voting procedure that we will use today. Voting on all of the resolutions is open now. I will not be pushing the resolutions to the meeting in sequence. For those shareholders attending the meeting online, using the online meeting platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen, along with the For, Against and Withheld voting options. Simply select one of these options to contour vote. If you change your mind, simply select another option. You can change your vote as many times as you wash up to the close of the poll. Your vote will have been submitted when the voting option icon changes color, having selected it and a vote received message appears. There is no final submit button as the voting is live. Please note that only shareholders, proxy holders or shareholder representatives may vote. You can vote at any time during the proceedings until I declare the voting closed. I will close the voting once we have concluded the Q&A section. I will give you a clear prompt to warn of the close in voting. I will now hand over to Martyn Coffey to say a few words about our latest trading update, which was issued earlier today. Martyn?

Thank you, Vanda. I thought I would read from the actual trading update that went out today. So recent trading has been strong, and the improving trend has continued. Group revenue in the 4 months ended 30th of April 2021, was up 46% at GBP 191 million against the same period last year. Which is impacted by the first U.K. lockdown, GBP 220 million and GBP 131 million. This represents an increase of 6% compared with the same 4-month period in 2019. The key drivers of this growth have continued to be strong demand in the domestic end market, improved trading in the public sector and commercial end market and further growth in the international market. Sales to the domestic end market, which represented approximately 30% of group sales were GBP 57 million. This represents an increase of 99% compared with the prior year and is up 20% compared to the same period in 2019. Sales to the public sector and commercial end market for the 4 months ended 30th of April 2021, were GBP 122 million and represented 64% of group sales. This represents an increase of 32% compared to the prior year and a slight increase against the same 4-month period in 2019 after adjusting for the impact on sales caused by the planned reduction in the Premier Mortar sites. Sales in the international business for the 4 months ended April 30, 2021 increased by 27% compared with 2020 and 32% compared with 2019. This reflects a continuation of the strong performance from Marshalls NV in Belgium. The group retains a strong balance sheet, supported by a flexible capital structure and maintains good headroom, which will support its investment priorities going forward. As previously indicated, the additional short-term bank facilities established in May 2020 have not been utilized, and these have now reached maturity. Bank facilities are now at pre-COVID-19 levels and total BGP 165 million, of which GBP 140 million are committed. The outlook, trading continues to improve and order books are currently strong. The Construction Products Association's recent spring forecast predicts an increase of 12.9% in 2021 and 5.2% in '22. This continues to reflect a more positive trading environment and the external purchases and consumer confidence index continued to strengthen. The Board is encouraged by the sustained increase in demand during the first 4 months of the financial year and now expects trading for the full year to be ahead of its previous expectations. I thought this year, it would be also be worth with all the interest from shareholders in sustainability for us to play a short video explaining what sustainability means here at Marshalls. [Presentation]

I'll now hand back to our Chair, Vanda Murray.

Thank you, Martyn. We'll now address any questions. [Operator Instructions] We haven't received any questions thus far, and I'll give it a few more seconds. So I would like to remind you that the voting will be closed once the Q&A session has finished. So if anyone has not yet cast their votes on the resolutions, please do so now. So judging from the information provided to me by the meeting administrators, there are no questions. So I will now allow a further half minute to enable any shareholder who has not yet cast their vote to do so. [Voting]

Ladies and gentlemen, the poll is now closed. Shortly, you will see the provisional results of today's call on the screen. So you can now see the results, the provisional results of today's call, and I can confirm and declare that all resolutions are carried. The final poll results will also be available on our website in due course. That concludes the meeting. Thank you all very much indeed.