CPM: Marshalls snaps up pre-cast concrete maker CPM for £38mln

Landscape products company Marshalls PLC (LON:MSLH) is to buy pre-cast concrete manufacturer, CPM Group Limited, for £38mln in cash. Marshalls, which manufactures paving slabs and floor tiles, said the acquisition of CPM is expected to be earnings enhancing in the first full year after completion. The news was well-received by investors, sending shares up 8.09% to 474.20p in morning trading. CPM, a maker of concrete pipes, containment and inspection chambers, manhole covers and retaining wall products for the UK construction industry, reported revenue of £51.2mln and profit before tax of £4.56mln in the year ended 31 December 2016. The business has supplied industrial concrete products for new housebuilding and major infrastructure projects such as Hinkley Point A nuclear power station in Somerset, the UK's High Speed Two rail programme and improvements to the upgrade to the A14 road between Ellington and Cambridge. Marshalls, which has manufacturing sites in the UK and Belgium along with offices in the US, Dubai and China, said the acquisition will be funded from existing group facilities. In a separate announcement, the company said there has been no change in its expectations for the full year since its half year results in August and will issue a trading update in January 2018. READ: Marshalls reports good growth in first half profit, remains confident of achieving 2017 expectations Numis repeated an 'add' rating and target price of 500p while upgrading its pre-tax profit forecast for 2018 by 8% to reflect the acquisition of CPM. "In our view this underlines how Marshalls can utilise its balance sheet strength to support sector leading earnings growth and maintain its premium rating to the sector," the broker said. "We still think that this acquisition will give Marshalls the scope to announce a special dividend in 2017 and following the trend of 2p in 2015, 3p in 2016, we forecast 4p in 2017 - which, together with the normal dividend of 10.5p, gives a yield of c.3.3%."