We think the Board has performed outstandingly in swiftly addressing the serious issues faced by the group in recent years and then stabilising it by significantly reducing the level of cash-burn.
Marshall has been restructured via disposal of the heaviest loss-makers or those with limited scale, reduced costs and improved efficiency of the remaining activities. However, the balance sheet has shrunk in recent years and was unable to fund the growth ambitions of the two core divisions, Marshall Group Property and Aerospace.
Consequently, in early June Cambridge East was sold for gross proceeds of £200m to a partnership comprising The Hill Group and Homes England. Investors have also been informed that a sale of Aerospace is being pursued, and that conversations are at an advanced stage with several potential buyers.
Taking into consideration all existing assets and liabilities, as well as a range of possible valuations for Aerospace, we see an approximate value for the Marshall Group today of between £164m and £219m, net of any likely tax liabilities. At the midpoint of that range, an indicative value per share equates to 324p.
