Marshalls PLC (LON:MSLH) lifted its interim dividend by 18% as the landscaping company delivered strong revenue growth despite the impact of adverse weather.
The company, which provides paving products for gardens and driveways, posted a 12% increase in revenue to £244.3mln in the first six months of the year.
Bad weather conditions in the first four months resulted in a reduction in sales of about £9mln.
READ: Marshalls highlights revenue growth, but Beast from East dented domestic customer sales
Pre-tax profit rose 12% to £32.5mln and operating margins edged up to 13.7% from 13.6% on the back of cost savings made under the so-called 2020 Strategy.
Marshalls shrugs off economic uncertainty
Chief executive Martyn Coffey said the company continues to outperform the wider market in the face of economic uncertainty.
"Recent trading has been very strong with both June and July revenues up 21% against the prior year period," he added.
Coffey said the group’s self-help programme to support organic growth is “progressing well “and the integration of concrete pipes maker CPM Group Limited is on track with trading "continuing strongly".
The £41.4mln acquisition of CPM, which Marshalls agreed to buy last year, resulted in net debt of £48.9mln for the period, compared to net cash of £1.2mln last year.
Full year guidance unchanged
Marshalls left its guidance for 2018 unchanged and raised its dividend to 4.0p from 3.4p.
For the year, the group plans to spend £28mln on capital expenditure to grow the business. By 2019, it expects to achieve costs savings of £5mln per year.
Marshalls sees its 2020 Strategy delivering “long-term sustainable” earnings growth and a high return on capital employed. The strategy includes bolstering its digital services, targeting selective bolt-on acquisitions and focusing on its profitable emerging UK businesses.
Shares jumped 5.5% to 446p in morning trading.
Numis maintained an 'add' rating and target price of 500p on the stock, saying: "With Marshalls posting revenue growth of 21% in June/July, the outlook for the second half looks positive and we think the risk to estimates continues to lie on the upside."