TIDMMSLH
RNS Number : 1960U
Marshalls PLC
01 April 2021
1 April 2021
Marshalls plc
(the "Company")
Directorate changes
Annual Report 2020 and Notice of 2021 Annual General Meeting
Board changes
Further to the announcement on 11 March 2021 of Jack Clarke's
agreement with the Board to retire as Group Finance Director and as
an Executive Director, Jack has agreed to step down from the Board
and as Group Finance Director with effect from today. As previously
announced, a transition plan is well advanced and Jack will remain
with the Group until 31 March 2022 to ensure a smooth and orderly
handover.
Janet Ashdown has informed the Board that, after six years with
the Company, she wishes to retire from the Board with effect from
the end of the Company's 2021 AGM in May. The Board would like to
thank Janet for her significant contribution to the success of the
Company, particularly in her capacity as Senior Independent
Non-Executive Director, Chair of the Remuneration Committee and
designated Non-Executive Director for workforce engagement. Janet
has provided invaluable knowledge and expertise in helping the
Board navigate a number of changes over recent years to the
governance landscape for listed companies.
With effect from the end of this year's AGM, Graham Prothero has
agreed, in addition to his duties as Chair of the Audit Committee,
to assume the role of Senior Independent Director. Graham has been
with the Company nearly four years and is an experienced listed
company director.
Angela Bromfield will take over as Chair of the Remuneration
Committee and designated Non-Executive Director for workforce
engagement. Angela has served more than 12 months on our
Remuneration Committee and is the serving Chair of the Remuneration
Committee for both Churchill China PLC and Harworth Group PLC.
The Nomination Committee has factored these changes into its
succession planning which continues to focus on ensuring that the
knowledge, skills and experience on the Board are aligned with the
Company's strategic priorities and enable it to comply with the
requirements of the UK Corporate Governance Code.
Annual Report and 2021 AGM
The Company has published its full Annual Report for the year
ended 31 December 2020 and Notice of 2021 AGM which is to be held
at 11.00am on Wednesday 12 May 2021 at the Company's offices at
Landscape House, Premier Way, Lowfields Business Park, Elland, HX5
9HT.
As Government measures restricting public gatherings and
non-essential travel are likely to remain in place until after the
2021 AGM, we have made arrangements, as we did last year, for the
Meeting to be a "hybrid" meeting, allowing shareholders to
participate electronically. We are making arrangements for the
quorum (which is any two shareholders or their proxies/corporate
representatives) to be satisfied by the presence of two employee
shareholders present in person, by proxy or as corporate
representatives.
We do not currently intend to admit any other shareholders in
person to the Meeting venue and encourage shareholders to
participate in the meeting electronically. Shareholders are also
strongly encouraged to vote by proxy in advance of the Meeting. Any
updates to the position will be included on our website at
www.marshalls.co.uk/investor/agm-details .
Copies of the documents listed below have been posted to
shareholders today:
1. Annual Report 2020
2. Notice convening the 2021 AGM
3. Form of Proxy for the 2021 AGM
A copy of each of the above documents has been submitted to the
UK Listing Authority via the National Storage Mechanism and will be
available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
These documents are also accessible via the Company's website at
www.marshalls.co.uk .
Reference is made to RNS announcement number 8638R published on
11 March 2021 (Annual Financial Report). In addition to the
information in that announcement, in accordance with DTR
6.3.5(2)(b), we also set out below the following extracts from the
Annual Report 2020 in full text form:
-- Statement of Directors' Responsibilities; and
-- Principal Risks.
-----------------------------------------------------------
Statement of Directors' Responsibilities in respect of the
Annual Report 2020 and the Financial Statements
The Directors who held office at the date of approval of this
Directors' Report confirm that, to the best of each of their
knowledge:
-- the Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company and the undertakings included in the consolidation taken as
a whole;
-- the Strategic Report contained in this Annual Report includes
a fair review of the development and performance of the business
and the position of the Company and the Group taken as a whole,
together with a description of the principal risks and
uncertainties that they face; and
-- the Annual Report and Financial Statements, taken as a whole,
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group's position and
performance, business model and strategy.
-----------------------------------------------------------
Principal Risks
Process
Risk management is the responsibility of the Board and is a key
factor in the delivery of the Group's strategic objectives. The
Board establishes the culture of effective risk management and is
responsible for maintaining appropriate systems and controls. The
Board sets the risk appetite and determines the policies and
procedures that are put in place to mitigate exposure to risks. The
Board plays a central role in the Group's risk review process,
which covers emerging risks and incorporates scenario planning and
detailed stress testing.
There is a formal ongoing process to identify, assess and
analyse risks and those of a potentially significant nature are
included in the Group Risk Register. The Group Risk Register is
reviewed and updated by the Board and the full Executive Management
team at least every six months and the overall process is the
subject of regular review. Risks are recorded with a full analysis
and risk owners are nominated who have authority and responsibility
for assessing and managing the risk. KPMG, as the Group's internal
auditor, regularly attends the risk review meetings. The conclusion
of KPMG is that the process continues to be a robust mechanism for
monitoring and controlling the Group's principal risks and for
challenging the potential impact of new emerging risks. All risks
are aligned
with the Group's strategic objectives and each risk is analysed
in terms of likelihood and impact to the business and the
determination of a "gross risk score" enables risk exposure to be
prioritised.
The Group seeks to mitigate exposure to all forms of strategic,
financial and operational risk, both external and internal. The
effectiveness of key mitigating controls is continually
monitored
and such controls are subjected to internal audit and periodic
testing in order to provide independent verification where this is
deemed appropriate. The effectiveness and impact of key controls
are evaluated and this is used to determine a net risk score for
each risk. The process is used to develop detailed action plans
that are used to manage, or respond to, the risks and these are
monitored and reviewed on a regular basis by the Group's Audit
Committee.
The Group has a formal framework for the ongoing assessment of
operational, financial and IT-based controls. The overriding
objective is to gain assurance that the control framework is
complete and that the individual controls are operating
effectively. Additional independent verification checking of key
controls and reconciliations is undertaken on a rolling basis. Such
testing includes key controls over access to, and changing
permissions on, base data and metadata.
The Group is prepared to accept a certain level of risk to
remain competitive but continues to adopt a conservative approach
to risk management. The risk framework is robust and provides
clarity in determining the risks faced and the level of risk that
we are prepared to accept. Marshalls' strategies are designed to
either treat, transfer or terminate the source of the identified
risk. There are well-established procedures to identify, monitor
and manage risk and, within the internal control framework,
policies and procedures are reviewed on an ongoing basis.
Principal risks and uncertainties
The Directors have undertaken a robust, systematic assessment of
the Group's emerging and principal risks. These have been
considered within the timeframe of three years, which aligns with
our Viability Statement.
Macro-economic and political
Nature of risk Key risk indicators Change in risk in
The Group is dependent * Delays in the awarding of and completion of the year
on the level of activity contracts. The sharp reduction
in its end markets. in sales due to COVID-19
Accordingly, it is in the second quarter
susceptible to economic * Reductions in consumer confidence and order pipeline. of 2020 was reversed
downturn, the impact from quarter three
of Government policy, and the second half
interest rates, of the year saw
volatility Mitigating factors significant
in world markets and * The Group closely monitors trends and lead indicators sales growth and
any continuing issues , increase in activity
following the UK's invests in market research and is an active member of levels throughout
departure from the the CPA. the sector. The UK
EU. Government's stated
objective is to support
Potential impact * The Group benefits from the diversity of its business construction and
The potential longer-term and end markets. The proactive development of the manufacturing to
impact of Brexit or product range continues to offer protection. fuel economic growth
wider global and significant
macro-economic investment
tension and uncertainty * The Group has developed detailed plans to support its support for
could lead to lower supply chain following the UK's departure from the EU infrastructure
activity levels which and to mitigate the risk of raw material shortages. and housing has been
could reduce sales announced. There
and production volumes. continues to be
This could have an * The Group undertakes scenario planning to support volatility
adverse effect on improved business resilience. in world markets
the Group's financial and global economic
results. The impact uncertainty continues
of supply chain issues, * The Group continues to target those market areas to be a risk.
exchange rate where growth prospects are greatest, e.g. New Build
fluctuations Housing, Road, Rail and Water Management.
and increased interest
rates could also have
an adverse impact * The Group focuses on its supplier relationships,
on material costs. flexible contracts and the use of hedging
instruments.
Pro-longed impact at further waves of the COVID-19 virus
Nature of risk Key risk indicators Change in risk in
Continued disruption * Government policy and delays in the full the year
caused by further implementation of the vaccine programme. Trading recovered
longer-term effects strongly in the second
of COVID-19 giving half of 2020 and
rise to further lockdowns * Delays in the awarding and completion of contracts. this has continued
and Government into the first quarter
restrictions. of 2021. Construction
Potential for further and manufacturing
waves caused by new Mitigating factors have been designated
virus variants. * The Group closely monitors trends and lead as essential industries
indicators. and the Group has
Potential impact already demonstrated
Longer than expected strong business
disruption could lead * The Group has detailed business continuity plans to resilience.
to prolonged uncertainty maintain flexibility and appropriate working However, further
and lower activity practices and procedures. delays could generate
levels which could renewed uncertainty.
reduce sales and
production * The Group undertakes ongoing scenario planning to
volumes. This could assess business resilience and risks that could lead
have an adverse effect to business disruption.
on the Group's financial
results.
* The Group focuses on communication with employees and
The requirement for other stakeholders, and maintains strong customer and
longer-term home working supplier relationships.
could give rise to
increased wellbeing
or mental health issues.
Cyber security risks
Nature of risk Key risk indicators Change in risk
Inadequate * Emergence of new cyber security risks. in
controls the year
and procedures This remains a
over * Increased examples of data loss in the wider market. high
the protection profile area
of and
intellectual considerable
property, Mitigating factors focus
sensitive * Use of IT security policies. is being given
employee to
information promoting
and market * The undertaking of regular cyber security risk audits awareness
influencing by specialists and the quick introduction of of IT security
data. mitigation controls and other recommended procedure policies.
The failure to updates. The net risk
improve is being
controls maintained due
against cyber * Sensitive data is currently restricted to selected to
security risk senior and experienced employees who are used to the continued
quickly handling such data. extension
enough, given of mitigation
the controls.
rapid pace of * Appropriate tools and training procedures are in The risk is
change place to protect sensitive data when stored and fast
and the transmitted between parties (e.g. encryption of hard growing and
continuing drives, restricted USB devices, secure data indiscriminate
introduction transmission mechanisms and third party security and the
of new audits). perception
threats. is that the
Increasingly, gross
all business * A continuous programme of awareness training for risk of data
is becoming staff. loss
more IT through new
dependent. (or as
yet unseen)
Potential security
impact threats
Risk of data continues
loss to increase.
causing
financial
and
reputational
risk.
Security of raw material supply / raw material shortages
Nature of risk Key risk indicators Change in risk in
Although the UK has * Temporary shortages and exchange rate cost inflation. the year
now left the EU, there The risk of temporary
remains a risk to shortages is mitigated
the security of raw * Decreases in vehicle availability and labour/driver by proactive supply
material supply and shortages. chain management
the risk of shortages and the use of alternative
in some areas. Changes suppliers.
in the market for
certain raw materials Mitigating factors Cost inflation remains
have created an increased * The Group benefits from the diversity of its business a risk as demand
reliance on imports. and end markets. for raw materials
increases against
The Group is susceptible a backdrop of continuing
to tariffs for certain * We are collaborating with all EU-based Tier 1 and economic uncertainty.
commodities and Tier 2 suppliers to ensure any supply risks from the All importers are
significant Brexit transition process are minimised. faced with the same
increases in the price issues.
of raw materials,
utilities, fuel oil * A focus on governance and financial controls
and haulage costs including a rolling "material risk" review process.
and decreases in vehicle
availability. Longer-term
risk of "carbon taxation". * The digitisation of the supply chain through the
implementation of a best-in-class Supply Relationship
Potential impact Management System.
The increased costs
could reduce margins
and may be further * The Group focuses on its supplier relationships,
impacted in the event flexible contracts and the use of hedging
of imbalances in the instruments. Use of flexible freight forwarding
mix of regional activity. options.
The risk of market
demand exceeding raw
material supply could * The Group utilises sales pricing and purchasing
lead to inefficient policies designed to mitigate the risks.
production, which
could reduce margins.
* The Group uses specialist delivery vehicles.
ESG focus and increasing requirements
Nature of risk Change in risk in
Increasing focus on * Negative feedback from stakeholders - loss of the year
ESG and the heightened business and investment due to lack of preparedness. Significantly heightened
awareness of environmental focus from stakeholders,
challenge which is Government, customers
translating into politics * Failure to meet internal targets. and investors and
and consumer behaviour. increased operational
and reporting requirements.
Risk of allocating
insufficient resource Mitigating factors
and investment to * The Group utilises experienced, specialist staff to
support the science-based support the Group's focus in this area.
targets and other
environmental protocols.
* Agreed carbon reduction plan and a set of KPIs
Mandatory human rights established.
disclosure from 2022
and increased focus
on modern slavery * The Group is committed to the Science Based Targets
and diversity reporting. initiative.
Potential impact
Hardening targets * Working groups established in all focus areas and
and greater consideration controls being progressively embedded across the
amongst investor and business.
stakeholder groups.
Risk that investors
and customers could
reduce support if
the Group failed to
improve performance
against targets or
did not report
appropriately.
Risk of customers
switching products
away from those with
a higher carbon footprint.
Climate change (including the impact of weather events)
Nature of risk Key risk indicators Change in risk in
The increase in frequency * Prolonged periods of bad weather (e.g. snow, ice and the year
and impact of extreme floods) which makes ground working difficult or Weather conditions
weather events such impossible. continue to be closely
as flooding, drought monitored but are
and coastal erosion. beyond the Group's
* Changing public perceptions of the longer-term control. Significant
The longer-term implications implications of climate change. increase in public
of climate change awareness of climate
give rise to the transition change.
risk to address the
challenges quickly Mitigating factors
enough. * The Group utilises centralised specialist functions
to support mitigation plans and the management of
Potential impact relationships on commercial contracts.
Adverse working conditions
could give rise to
disruption and delays * Climate change risk analysis in place.
that might reduce
short-term activity
levels. This could * We are committed to water harvesting and recycling
reduce sales and production schemes and have an environmental target of not using
volumes and therefore any mains schemes.
have an adverse effect
on the Group's financial
results. * The development of resilience strategies for climate
change is a key element of the Group's Climate Change
The cost impact of Policy.
the "Environmental
Protocol" and mitigation
programmes could lead * The development of the Group's Water Management
to increasingly expensive business and the continuing focus on new product
processes. development.
Financial risk caused
by adverse impact
on margins and cash
flows as well as sales
and production volumes.
Threat from new technologies and business models, and the
increased pace of digital change in the market
Nature of risk Key risk indicators Change in risk in
Reduction in demand * Less demand for traditional products and routes to the year
for traditional products. market. The ongoing
Risk of new competitors diversification
and new substitute of the business,
products appearing. * Emergence of new competitors and new digital business the continued development
models. of the Marshalls
Failure to react to brand and the focus
market developments, on new products and
including digital * More widespread availability of artificial greater manufacturing
and technological intelligence technology. efficiency continue
advances. to mitigate the risk.
Potential impact The pace of digital
The increased competition Mitigating factors change in the market
could reduce volumes * Good market intelligence. continues to increase
and margins on traditional and the risk is
products. Despite increasing.
significant additional * Flexible business strategy able to embrace new This is now seen
focus made by the technologies. as a major risk by
Group in this area the market.
in recent years, there
remains a risk that * Significant focus on research and development and new
a new third party products.
could use emerging
digital technology
to enter the market * Development of the Group's E-platform and developing
and transition more digital strategy.
quickly and effectively.
Corporate, legal and regulatory
Nature of risk Key risk indicators Change in risk in
Inadvertent failure * Increased regulatory and compliance requirements. the year
to comply with elements The significant increase
of a significantly in governance and
increased governance, * Integration requirements for new acquisitions. regulation continues
legislative and regulatory to require additional
business environment. management focus
The Group may be adversely * Significant increases in the penalty regime for and robust compliance
affected by an unexpected health and safety and environmental incidents. procedures within
reputational event, all areas of the
e.g. an issue in its business.
ethical supply chain
or due to a health Mitigating factors
and safety incident. * Centralised legal and other specialist functions, the
use of specialist advisers and ongoing monitoring and
Potential impact training.
Significant increases
in the penalty regime
across all areas of * The Group has a formal Group sustainability strategy
business (e.g. health focusing on impact reduction.
and safety, competition
law, the Bribery Act
and GDPR) could lead * The Group employs compliance procedures, policies,
to significant fines ISO standards and independent audit processes which
in the event of a seek to ensure that local, national and international
breach. regulatory and compliance procedures are fully
complied with.
A health and safety
or environmental incident
could lead to a disruption * The Group uses professional specialists covering
to production and carbon reduction, water management and biodiversity.
the supply of products
for customers. Such
incidents could lead
to prosecutions and
increased costs and
have a negative impact
on the Group's reputation.
Competitor activity
Nature of risk Key risk indicators Change in risk in
The Group has a number * Threat from new competitors and new technologies. the year
of existing competitors The more uncertain
which compete on range, market environment
price, quality and * Less demand for traditional products and the has not led to any
service. Potential increased emergence of new digital business models significant changes
new low cost competitors and product solutions. in competitive pressure.
may be attracted into
the market through
increased demand for
imported natural stone Mitigating factors
products. * The Group has unique selling points that
differentiate the Marshalls branded offer.
Potential impact
The increased competition
could reduce volumes * The Group focuses on quality, service, reliability
and margins on manufactured and ethical standards that differentiate Marshalls
and traded products. from competitor products.
* The Group has a continuing focus on new product
development.
* The continued development of the Group's digital
strategy and its focus for customers and all
stakeholders.
Customers
Nature of risk Key risk indicators Change in risk in
The UK business has * Changes to market structure or trading relationships. the year
a number of key customers, Although the underlying
in particular the risk continues, the
national merchants. * New customer strategies. effective management
This is partly as of key relationships
a result of the and the ongoing
consolidated * Customer feedback and changing expectations. diversification
nature of this market. of the business continue
to mitigate the risk.
Potential impact
The loss of a significant Mitigating factors
customer may give * The Group focuses on brand and new product
rise to a significant development, quality and customer service
adverse effect on improvement.
the Group's financial
results.
* The Group maintains a national network of
manufacturing and distribution sites.
* The Group undertakes ongoing reviews of trading
policies and relationships and maintains constant
communication with customers.
* We invest in market research to ensure that we have a
strong understanding of end user requirements and the
quality of our distribution network.
Health and safety
Nature of risk Key risk indicators Change in risk in
Unexpected health * Integration requirements for new acquisitions. the year
and safety incident, Health and safety
possibly caused by continues to be a
human error or the * Significant increases in the penalty regime. high profile risk
actions of a subcontractor. area.
Ongoing risks in relation Increased risks arising
to COVID-19 and the Mitigating factors from COVID-19, including
need to maintain safe * Centralised specialist functions. mental health and
working environments. employee welfare.
Ongoing welfare and * Regular communication and support for employees,
mental health of employees. including those working from home. Mental health
first aiders. "Return to work" strategy and policies
Potential impact in place.
Risk of harm to all
stakeholders, including
on-site employees * Comprehensive five-year health and safety strategy.
and subcontractors.
Negative impact of * Ongoing monitoring, training and health and safety
working from home audits.
for certain employees.
Significant increases * All senior managers receive the Marshalls Health and
in penalty regime Safety and Environmental stage three training.
could lead to significant
fines and prosecution.
A major incident could
lead to a disruption
to production and
a negative impact
on the Group's reputation.
People risks
Nature of risk Key risk indicators Change in
Ongoing risks and * Skill shortages and lack of diversity within the risk in
requirements concerned workforce. the year
with training, development The impact of
and succession planning. COVID-19
Implications of technological * Increased stress levels within workforce leading to has created
change and automation. employee absenteeism. new
Welfare and mental challenges
health related risks for employees
associated with the * Increased levels of staff turnover. with
COVID-19 pandemic. changed
working
Potential impact requirements,
* Risk of reduced skills and inadequate training Mitigating factors health and
potentially leading to reduced productivity and * Focused Human Resources department with experienced safety
efficiency. staff and specialist skills. regulations
and
operational
* Implications for employee health and wellbeing and * Strong employee and trade union relationships. working
overall workforce morale. practices.
These include
* Strong communication channels and employee feedback issues
* Potential risk to the Marshalls brand. through the Employee Voice Group. that could
give rise
to heightened
* Regular feedback questionnaires supported by a third employee
party provider. wellbeing
issues
and risks to
* Independent "Safecall" employee helpline. mental
health.
* Focus on training, apprenticeships and ongoing staff
development and leadership potential.
----------------------------------------------------
Cautionary statement and Directors' liability
The Annual Report 2020 has been prepared for, and only for, the
members of the Company, as a body, and no other persons. Neither
the Company nor the Directors accept or assume any liability to any
person to whom the Annual Report is shown or into whose hands it
may come except to the extent that such liability arises and may
not be excluded under English law. Accordingly, any liability to a
person who has demonstrated reliance on any untrue or misleading
statement or omission shall be determined in accordance with
Section 90A of the Financial Services and Markets Act 2000.
The Annual Report contains certain forward-looking statements
with respect to the Group's financial condition, results, strategy,
plans and objectives. These statements are not forecasts or
guarantees of future performance and involve risk and uncertainty
because they relate to events and depend upon circumstances that
will occur in the future.
There are a number of factors that could cause actual results or
developments to differ materially from those expressed, implied or
forecast by these forward-looking statements. All forward-looking
statements in the Annual Report 2020 are based on information known
to the Group as at the date of the Annual Report and the Group has
no obligation publicly to update or revise any forward-looking
statements, whether as a result of new information or future
events. Nothing in the Annual Report should be construed as a
profit forecast.
The information communicated in this announcement regarding
changes to our Board is inside information.
Enquiries:
Martyn Coffey, Chief
Executive Marshalls plc +44 (0)1422 314777
Shiv Sibal, Company Secretary Marshalls plc +44 (0)1422 314767
Andrew Jaques MHP Communications +44 (0)20 3128 8540
Charlie Barker
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END
MSCJBMFTMTBJBJB
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April 01, 2021 02:00 ET (06:00 GMT)
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