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Thu October 21 2021

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Marley plans flotation to fund acquisitions

16 Sep The private equity owners of Marley Group, the roof tile producer, are considering floating the company on the London Stock Exchange.

Marley has 21% of the GB roofing tile market
Marley has 21% of the GB roofing tile market

It has only been two years since Marley was acquired by Inflexion Private Equity from the Belgian materials group Etex but Inflexion is already looking to offload.

Marley’s directors believe that there are a range of opportunities to leverage the Marley brand by acquiring roofing components and accessories, with further extensions of the Marley roof system providing cross-selling opportunities.

The directors say that they have identified a pipeline of potential acquisition targets for the short and medium term.

While a flotation is not yet fully decided – the appetite of potential investors will be tested first – Marley said that it intends to publish the required registration document that precedes an initial public offering.

Marley is the largest manufacturer of roofing tiles in Great Britain, with an estimated market share of 21 %. It also produces a full range of concrete and clay fittings, timber battens, roofing accessories and roof-integrated solar PV panels, following its acquisition in April 2021 of Viridian Solar.

It claims 30% of the concrete roof tile market and 48% for clay plain tiles. It is the UK's only manufacturer of graded roofing battens, with a market share of 32.5% in 2020.

Having acquired John Brash in 2016 (a market leader in timber battens), it grades and processes raw timber at its timber manufacturing and sawmill facility, with a total production capacity of 99,000 m³ a year.

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It also has a contracting division in Scotland, primarily offering roofing and main contracting services.

In the 72 weeks to 31st December 2019, Marley Ltd turned over £144m and made a pre-tax profit of £21.3m.

Marley has strategic plans for both organic growth, through market development and innovation, and inorganic growth, through acquisitions and brand expansion.

Marley Group chairman Paul Lester said: “Marley is a premium building materials brand and a sector leader in roofing thanks to its reputation for quality and service amongst its customer base and a near 100-year heritage. The group’s differentiated proposition is underpinned by significant market demand thanks to the UK’s rapidly ageing housing stock. The structural undersupply of new homes, which is high on the political agenda and supported by multiple government policies, is also a key demand driver and one that plays extremely well to Marley’s long track record of innovation and sustainability.

“Led by a highly experienced management team, the group has delivered a resilient financial performance throughout the economic cycle, resulting in industry leading margins and high cash generation. This, coupled with a clear strategy for growth through further innovation, acquisitions and brand extension, means that the group is well placed to build on its strong momentum to date.”

Chief executive David Speakman added: “Our business combines the most comprehensive pitched roofing system available and well-invested, freehold production sites across the country which can provide significant additional capacity as needed. This, combined with a number of positive market dynamics, gives us the confidence to pursue our growth agenda and we see multiple opportunities for both organic and inorganic expansion.

“Marley is further differentiated by our long and successful track record in sustainability and a clear roadmap to expand our ESG credentials. These credentials are strengthened by plans to expand our solar offering to deliver a range of smart energy solutions to homebuilders, social housing providers and homeowners. This means Marley is well positioned to play an increasingly important role in helping deliver homes that meet the UK’s green agenda.”

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