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Marshalls plans to pay final dividend after returning to growth

Domestic revenues rose 9% in the second half but the much larger Public Sector & Commercial business declined 6%

Marshalls -

Marshalls PLC (LON:MSLH) said it plans to pay a final dividend for 2020 after sales returned to growth in recent months.

The maker of paving stones reported revenues of £469mln for the past year, down 13% on the year before.

Strong demand in the domestic end market has been a key driver of sales into the final months of the year, plus a return to more normal levels of trading in the public sector and commercial end markets, the FTSE 250 company said.

In the six months to end December, domestic revenues rose 9% and the small overseas business was up 18%, but the core Public Sector & Commercial business declined 6%.

Management reported that the commercial order book in rose year-on-year in the fourth quarter.

“Reflecting our increasing market confidence, in 2021 we will commence construction of a flagship dual block plant at our St. Ives manufacturing site, which will be the first facility of this nature in the UK,” Marshalls said, with a significant capital investment of roughly £20mln over three years.

After the company skipped its interim payout, broker Shore Capital estimated the final dividend will be “in the region of 4.5p per share”, up from a previous forecast of 2.5p.

This implies a payout ratio of 50% and “signals optimism that earnings recovery will continue into FY21”.

Quick facts: Marshalls

Price: 684 GBX

LSE:MSLH
Market: LSE
Market Cap: £1.37 billion
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