Marley acquisition provides great opportunities for future growth
Thursday 19 May 2022 Author: Ian Conway

Marshalls (MSLH) 530p

Loss to date: 17%

Original entry point: Buy at 638.5p, 25 February 2021

If we owned a crystal ball and had foreseen the last month’s sell-off we could have closed our trade on Marshalls (MSLH) and congratulated ourselves on a job well done.

As it is, the shares are now 17% below our starting price, yet the business is in a much stronger place than it was a year ago.

Group revenues for the first four months of the year were up 5% against record sales in March and April last year despite one less trading day.

Infrastructure and new build housing drove the increase, while sales to the RMI (repair, maintenance and improvement) market were lower solely due a lack of installers, many of whom were on holiday whereas last year the country was in lockdown.

End customer demand remains strong with just under 20 weeks’ work of orders at the end of April, and the firm expects domestic sales to ‘progressively normalise’ during the remainder of the year.

Meanwhile, the integration of Marley is well underway with ‘clear opportunities to leverage Marshalls’ operational, manufacturing and sustainability expertise’ across the business.

The firm is confident of meeting its full-year expectations, and we remain confident in its prospects.

SHARES SAYS: We’re sticking with this great business.

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