Tiling giant with feet of clay

Marley's UK roof tile prices have fallen by 2-3% over the past six months as a consequence of a 15% downturn in volume. Marley chief executive David Trapnell last week described this setback as the "biggest disappointment" of the year.

Announcing Marley's interim results for the six months to June, Trapnell gave details of how the group's products had fared during a difficult period for the construction industry.

Plastic products had performed reasonably well, as had Marley's flooring, particularly its commercial flooring division.

With heavyside, however, there was disappointment with both concrete and clay materials, with roof tiles taking the brunt of a fall in demand. Thermal blocks escaped relatively unscathed; volumes were unchanged on 1995 levels, enabling Marley to sustain prices.

Marley has 40 per cent of the UK concrete roof tile market and a similar share of clay tile sales.

"Redland has 40 per cent figures as well," said Trapnell. "The opportunities for both of us to acquire another roof tile business in the UK are remote. We're happy with our existing position in the UK in roof tiles."

Marley's group profit before tax was œ63 million (œ24 million) from a turnover of œ345 million, up œ32 million. These overall figures mask a determined push by Marley to expand overseas in order to reduce dependence on a difficult UK market.

The UK's contribution to total turnover dipped from 50 per cent (in the first half of 1995) to 36 per cent, while its share of total profit dropped even more dramatically, down from 40 per cent to just 20 per cent.

Asked if the Building Regulations' higher insulation standards had hit demand for concrete roof tiles, Trapnell said this was not the case. "It is not a problem for concrete tiles," said Trapnell. In fact, he claimed, the new standards had been to Marley's benefit.

Better insulation has caused condensation problems, resulting in an upturn in demand for Marley's ventilation products. And the requirement for better ventilation in internal kitchens and bathrooms has been of further benefit.

Looking ahead, Trapnell said the UK outlook was uncertain. "We have seen signs of a slow improvement in July and August," he said, "but there is still a feeling of uncertainty and this is our main concern for the second half."

Trapnell said that Marley is looking for new business opportunities in the UK. Smaller bolt-on acquisitions are under consideration.

Half of Marley's roof tiles go to the new housing market, the other 50% are used in commercial building and in refurbishment.

"Refurbishment has fallen off dramatically," he said. "But it has to come back as the work must be done sometime."