Marshalls plc (MSLH.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Marshalls plc manufactures and supplies hard landscaping products in the United Kingdom and internationally.It offers interior, garden, and driveways products, including garden paving, driveways, garden paths, kerbs and edging products, and garden walling products; artificial grass; garden and driveway design tools; and stone products.The company also provides landscaping solutions for the commercial construction sector, such as paving, kerb, linear drainage, walling, landscape protection, landscape furniture, mortar and screed, aggregate, sand and block stone, masonry and façade, and traffic calming products.

In addition, it engages in the property management activities; supply of street furniture; sourcing and distribution of natural stone products; and operation of a quarry, as well as supply of various paving products.The company provides its products to local authorities, commercial architects, specifiers, contractors, house builders, DIY enthusiasts, professional landscapers, driveway installers, and garden designers.Marshalls plc was founded in 1890 and is based in Halifax, the United Kingdom.

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1.b. Last Insights on MSLH

Marshalls' recent stock performance has been negatively driven by weak trade data from China, a significant trading partner, leading to market volatility. The company's fair value estimate stands at UK£2.46, indicating a potential undervaluation. The lack of positive catalysts, such as new product launches or acquisitions, has contributed to the negative sentiment. Additionally, the company's recent silence on share buyback plans, a typically positive event, has not provided any relief to investors.

1.c. Company Highlights

Last Price	174.6
Change Percentage	-0.34%
Open	171.6
Previous Close	175.2
Market Cap ( Millions)	441
Volume	447750
Year High	327.5
Year Low	159.2
M A 50	172.26
M A 200	224.07

FCF Yield	8.91%
Dividend Yield	4.35%
ROE	2.91%
Debt / Equity	31.11%
Net Debt / EBIDTA	330.86%
Price To Book	0.66
Price Earnings Ratio	22.95
Price To FCF	11.22
Price To sales	0.93
EV / EBITDA	10.92

2. Transcript Summary

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3. NewsRoom

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This $166bn US retailer may just be the anti-tech stock

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Nov -22

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‘Anxious’ shoppers keep scaling back and hunting for deals, retailers say

Nov -21

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Pressured retailers are posting a complicated quarter — with a dash of ChatGPT

Nov -20

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Lowe's Profits Top Estimates as TJX Raises Outlook

Nov -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.07%)

6. Segments

Landscape Products

Expected Growth: 1.2%

Marshalls plc's Landscape Products segment growth of 1.2% is driven by increasing demand for outdoor living spaces, government initiatives for urban regeneration, and rising adoption of sustainable landscaping solutions. Additionally, the company's focus on product innovation, strategic partnerships, and expanding distribution channels also contribute to the growth.

Roofing Products

Expected Growth: 0.8%

Marshalls plc's Roofing Products segment growth of 0.8% is driven by increasing demand for sustainable and eco-friendly roofing solutions, government initiatives promoting energy-efficient buildings, and rising construction activities in the UK. Additionally, the company's focus on product innovation, quality, and customer service has contributed to its market share growth.

Building Products

Expected Growth: 1.1%

Marshalls plc's Building Products segment growth of 1.1% is driven by increasing demand for landscaping and patio products, supported by government initiatives for outdoor spaces and infrastructure development. Additionally, the company's focus on sustainable and eco-friendly products resonates with environmentally conscious consumers, contributing to the segment's growth.

7. Detailed Products

Concrete Products

Marshalls plc offers a wide range of concrete products, including blocks, bricks, and paving solutions for construction and landscaping projects.

Paving and Kerbs

Marshalls plc provides a variety of paving and kerb solutions, including natural stone, concrete, and porcelain products for driveways, paths, and outdoor spaces.

Block Paving

Marshalls plc offers a range of block paving products, including concrete and permeable pavers for driveways, paths, and outdoor spaces.

Natural Stone

Marshalls plc provides a selection of natural stone products, including limestone, sandstone, and granite for landscaping and construction projects.

Water Management

Marshalls plc offers a range of water management solutions, including permeable pavers, drainage systems, and SuDS (Sustainable Drainage Systems) for construction and landscaping projects.

Street Furniture

Marshalls plc provides a range of street furniture products, including benches, bins, and bollards for urban and public spaces.

Protective Barriers

Marshalls plc offers a range of protective barriers, including crash barriers, pedestrian guardrails, and security bollards for highways and public spaces.

8. Marshalls plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Marshall's plc has a moderate threat of substitutes due to the presence of alternative products in the market, but the company's strong brand reputation and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

Marshall's plc has a low bargaining power of customers due to its strong brand reputation and customer loyalty, which reduces the ability of customers to negotiate prices or demand better services.

Bargaining Power Of Suppliers

Marshall's plc has a moderate bargaining power of suppliers due to the presence of multiple suppliers in the market, but the company's large scale of operations and strong relationships with suppliers mitigate this threat to some extent.

Threat Of New Entrants

Marshall's plc has a low threat of new entrants due to the high barriers to entry in the market, including high capital requirements and regulatory hurdles, which make it difficult for new companies to enter the market.

Intensity Of Rivalry

Marshall's plc operates in a highly competitive market with many established players, which leads to a high intensity of rivalry and a constant need to innovate and improve services to stay ahead of competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	28.22%
Debt Cost	9.00%
Equity Weight	71.78%
Equity Cost	9.67%
WACC	9.48%
Leverage	39.31%

11. Quality Control: Marshalls plc passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Vicat

A-Score: 7.1/10

Value: 7.9

Growth: 6.1

Quality: 4.8

Yield: 6.9

Momentum: 9.5

Volatility: 7.3

1-Year Total Return ->

Miquel y Costas

A-Score: 7.0/10

Value: 6.8

Growth: 4.9

Quality: 7.1

Yield: 6.9

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

Breedon

A-Score: 5.5/10

Value: 6.4

Growth: 6.0

Quality: 4.7

Yield: 6.9

Momentum: 2.5

Volatility: 6.7

1-Year Total Return ->

CRH

A-Score: 5.4/10

Value: 2.6

Growth: 7.2

Quality: 5.3

Yield: 4.4

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

Marshalls

A-Score: 3.9/10

Value: 6.1

Growth: 2.6

Quality: 4.6

Yield: 6.9

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

Ibstock

A-Score: 3.4/10

Value: 3.8

Growth: 1.6

Quality: 3.2

Yield: 6.2

Momentum: 1.0

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.46%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.48%

Marshalls plc - GB00B012BV22

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MSLH

1.c. Company Highlights

Stable Momentum

Medium Volatility

Fairly Valued

Revenues Miss

Strong Momentum

Average Growth

Average Yield

Average Quality

Weak Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.07%)

6. Segments

Landscape Products

Expected Growth: 1.2%

Roofing Products

Expected Growth: 0.8%

Building Products

Expected Growth: 1.1%

7. Detailed Products

Concrete Products

Paving and Kerbs

Block Paving

Natural Stone

Water Management

Street Furniture

Protective Barriers

8. Marshalls plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Marshalls plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.75$

Current Price

1.75$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA