Marshalls PLC (STU:1QG) (H1 2026) Earnings Call Highlights: Profit Rises 13% Despite Flat ...

Q & A Highlights

Q: Could you split the volume and price components of the flat revenue in landscaping, and is the GBP 11 million of annualized cost savings fully delivered by the end of this year? A: Justin Lockwood (CFO): In landscaping, volumes were down between 2% and 3%, with a mix weakening of about 1%, offset by price. Regarding surcharges, we implemented Iran-related surcharges in May and June to recover cost increases, with no plans to increase them further. The net impact of the Iran conflict on our direct cost base was about GBP 1 million in H1. The GBP 11 million in annualized savings will be fully delivered this year, with no incremental benefit after 2026, though we retain optionality to review the cost base if markets remain subdued.

Q: Where has the 2.6% market share growth in landscaping come from, and can you provide details on the water management business split and framework agreements? A: Simon Bourne (Interim CEO): The share growth in landscaping is a rebuild of previously lost share, plus additional gains across the patch, from both smaller regional competitors and larger competition, driven through merchants and direct-to-site work. Justin Lockwood (CFO): Water management revenues were about GBP 80 million last year, with roughly two-thirds from new build housing. That mix has shifted by 6-7 percentage points toward commercial infrastructure due to weak new build activity. Framework agreements are effectively pre-qualification trading terms with water companies, not exclusive or with specific pound-note commitments, but essential to access their investment plans.

Q: Does the GBP 17 million self-help value bucket include the GBP 11 million cost savings, and what volume recovery is assumed in the cyclical upside bucket? A: Justin Lockwood (CFO): The GBP 11 million includes GBP 3 million already delivered in 2025, so GBP 8 million is incremental. Self-help also includes market share growth and product mix improvement, with delivery expected over the next two to three years. Simon Bourne (Interim CEO): The self-help is not just cost; it includes new product development and building out the good, better, best product ladder to drive mix. Justin Lockwood (CFO): The cyclical recovery assumes around 12-15% volume recovery, which does not assume a return to 2022 volumes.

Q: Do you expect a stronger second half in landscaping as more self-help actions come through, and can you share price/volume splits for Marley and competitive dynamics in Viridian? A: Simon Bourne (Interim CEO): In landscaping, it will be more of the same. The cost base is on track, and we will continue driving mix and focus, without cutting into muscle. Justin Lockwood (CFO): In Marley, concrete roof tile volumes are down significantly due to lower new build housing, but our focus on the more resilient RMI market has helped us build overall share. In clay roof tiles, share increased markedly due to a strategic pricing decision and a competitor's extended maintenance, which should normalize in Q4. In Viridian, there are new entrants, including a French company and a new product from former management, but they are not significantly impacting our volumes at this stage.

Q: What is the current state of the domestic installer pipeline, builder merchant stock levels, and the growth of ArtBox in domestic usage? A: Simon Bourne (Interim CEO): The installer scheme was reinvigorated at the end of last year, and while the market is still subdued, we are picking up more business and are encouraged by early signs. Merchant stock levels are about average; we are working closely with partners to avoid overstocking and monitoring mix. Justin Lockwood (CFO): For ArtBox, the rate of sales growth in the UK was faster than panel sales, so penetration is increasing, albeit modestly. International revenues doubled, and we are excited about that opportunity.

Q: Can you provide color on the revenue momentum trend between May, June, and into July, given the flat H1 performance? A: Simon Bourne (Interim CEO): The first couple of months were extremely wet, impacting us, followed by a pickup. However, the extremely hot weather and the World Cup had an impact, creating a slowdown. There is a sweet spot between extreme wet and hot weather. Justin Lockwood (CFO): Trying to pick out discernible trends among all that is difficult, and we will leave that to cleverer people.

Q: Are the water management framework agreements at the water utility level or project level, and are they exclusive? A: Simon Bourne (Interim CEO): They are at the water utility level, similar to a preferred supplier agreement. They are not exclusive, as other suppliers will also have frameworks in place. Having a framework does not guarantee revenue; it just allows you to participate in design activities, and we are actively working to secure more as part of our pivot toward infrastructure-led growth.

Q: Can you provide an update on the group's order books and whether project confidence is improving? A: Simon Bourne (Interim CEO): We are happy with the pipeline of specification-led activity, which serves as our order book. The issue remains confidence to start projects, with some delays rather than cancellations. Commercial infrastructure has been more robust, but we still see slight delays in project starts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .