Marshalls are flying as they head to 2020

Highlights:

· Revenue increased by 8 per cent to £386.2 million (2014: £358.5 million) as a result of volume growth driven by strong demand

· Strong profit before tax growth of 57 per cent to £35.3 million (2014: £22.4 million)

· Improvements in operating margins to 9.7 per cent (2014: 7.1 per cent) due to greater operational gearing

· Return on capital employed improved 52 per cent (650 basis points) to 19.0 per cent (2014: 12.5 per cent) as a result of both greater profits and tighter capital management

· Basic EPS up 41 per cent to 14.32p (2014: 10.13p)

· Final dividend for 2015 recommended of 4.75 pence per share which represents an increase of 19 per cent for the year.

· In addition, we have recommended a supplementary dividend of 2.00 pence per share

· Implementation of a wide-ranging digital strategy, including the creation of web and mobile applications and data mining techniques to identify market trends

· New strategic vision to drive continued growth out to 2020

Current priorities:

· To improve operational efficiency and promote innovation

· To further strengthen the Marshalls brand by delivering systems-based solutions, service excellence and new product development

· To grow our business both organically and selectively through acquisitions

· To continue to develop and invest in our strategic growth initiatives, particularly in Water Management, Street Furniture, Rail and New Build Housing

2020 Strategy:

Phase 1 of our strategy to return to pre-recession profitability has now been achieved. The next phase of our strategy, which will take us to 2020, has now been determined. The Board intends to build on the progress delivered in recent years and to take advantage of the supportive market environment. A series of initiatives and actions to both drive sales growth and improve operational efficiencies have been agreed. These are detailed below and include:

· A supportive market environment through to 2020

· Achieve price increases to cover cost increases

· Additional capital investment programme of £15 million to deliver cost savings of £5 million per year

· Achieve sales growth for the smaller UK businesses of at least 10 per cent per annum

· New product development to accelerate annually

· Increased investment in digital strategy

· Acquisition strategy to enhance this organic growth

· Our 2020 strategy will drive long term growth and shareholder returns

Commenting on these results, Martyn Coffey, Chief Executive, said:

"This has been another good year for Marshalls with significant revenue and profit growth delivered in 2015. This has been matched by a strong cash performance resulting in the increased dividend for this year. Trading conditions remain positive and the Group continues to experience positive order intake and sales growth across the business.

Marshalls Register

The Group's Domestic strategy is to drive sales through approved domestic installers. The Marshalls Register has grown by 5 per cent in the last year to 1,862 teams and consistently provides a high standard of quality and a market leading level of service. The survey of domestic installers at the end of February 2016 revealed order books of 10.5 weeks (February 2015: 9.0 weeks).

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