Marshalls in talks to offload quarry operations

MARSHALLS, the paving and landscaping materials company, has said it is in “advanced discussions” to sell off a string of its quarry operations for around £17.5m.

The Huddersfield company is in talks with Breedon Aggregates England, a subsidiary of Breedon Aggregates, regarding the sites which supply aggregates, sand and gravel.

Marshalls said it will retain all of its dimensional stone quarries, some of which produce aggregate as an ancillary product.

The quarries that would be affected are the group’s freehold and leasehold quarries at Clearwell in Gloucestershire, which mainly produce limestone aggregates, and the group’s sand and gravel quarries at Dunsville near Hatfield in South Yorkshire, Astley Moss in Greater Manchester and Mold in North Wales.

The discussions also include an option to develop sand and gravel resources near Saredon in Staffordshire.

The quarries supply aggregate materials to the construction sector, including materials used by Marshalls in the manufacture of its range of concrete products.

The discussions also involve commercial arrangements for the continued supply of materials to Marshalls’ manufacturing sites, the company said.

Chief executive Graham Holden said: “Marshalls has been a niche player in the UK aggregates market for a number of years and, while the business is profitable, it remains ancillary to the core operations where our growth focus lies.

“If completed, the consideration received by Marshalls from the sale of these quarrying operations would initially be used to reduce net debt and we consider that such a transaction would be in the best interest of shareholders.”

For the year ended December 31, the operating profit generated from the operations at these quarries was £1.1m, based on an annual turnover of £10m, of which £8.8m came from sales outside the group.

As at December 31, the value of the gross assets under discussion was £14.9m.

Marshalls said the final consideration for the operations will be up to £19m.

Last year Marshalls cut its workforce by 15% as it underwent a restructuring strategy to plan for future growth.

Record rainfall in the period contributed to sales falling by 7% to £309.7m – £13m of which was directly attributable to the downpours.

For the year to December 31, Marshalls posted pre-tax profits from continuing operations before operational restructuring costs and asset impairments down by £3.3m at £10.4m.

In the company’s annual trading statement at the beginning of March, Mr Holden said net debt had been reduced to £63.5m.