Trading Statement

Marshalls PLC
06 January 2003


                                 MARSHALLS PLC


                               TRADING STATEMENT

                       TWELVE MONTHS TO 31 DECEMBER 2002


Marshalls' sales in the twelve months to 31 December 2002 were £342 million, 4
per cent ahead of last year.  The Group expects operating profits in the period
to be comfortably ahead of 2001 and in line with market expectations before
charging reorganisation costs, of approximately £1.5 million, for efficiency
improvements connected with our ongoing capital investment programme.  Capital
investment was more than £30 million for the second successive year.  Taking
into account the profit on the disposal of the Flooring business the Group
profit before tax should be ahead of market forecasts.

All Divisions achieved sales growth.  Landscape Products increased by 3 per
cent, Clay Products by 3 per cent and Natural Stone Products, with a full year
contribution from Stancliffe Stone, by 27 per cent.  Emerging Businesses,
including the contribution from the Flooring business sold after eleven months,
increased sales by 3 per cent.  The remaining Emerging Businesses increased
sales by 13 per cent.



GROUP OVERVIEW

The Group continued to experience strong trading conditions during the second
half.  We managed to overcome the stiff challenge presented by the second half
of 2001 when we achieved sales growth of 15 per cent.  Had it not been for the
special events in June 2002 to which we referred at the interims, sales in the
year would have been considerably higher.  Indeed, the orders in the pipeline
would have been sufficient to enable the Group to meet the market sales forecast
for the year.  Customer demand remains strong and, as a consequence of the
backlog of domestic work, the Installers begin 2003 with healthy order books.
The commercial and public sector markets, where our experience was similar to
the domestic market, also remain strong.



LANDSCAPE PRODUCTS DIVISION

The Division had sales of £255 million, 3 per cent ahead of last year.  This
compares with an increase of 5 per cent at the end of the first half over the
first half of 2001.

The temporary slowdown in the rate of growth was because this Division in
particular had exceptionally strong trading in the second half last year, and
was most affected by the backlog of work due to the special events of June 2002
where sales in that month were more than £6 million lower than the previous
year.

The market intelligence we gain through regular contact with our network of
approved Registered Installers confirms that the domestic demand for our
products remains buoyant.  Sales to the commercial and public sector grew by 4
per cent in the full year.  This compares with forecast growth in the
construction industry of 7 per cent.  These figures suggest that we will see the
impact of this sector growth during 2003 as our products are installed at the
very end of most construction projects.


CLAY PRODUCTS DIVISION

The Division increased sales by 3 per cent to £30 million in the full year.  The
second half sales growth was slightly stronger than the first six months.  Sales
of bricks through the Landscape Products Division Service Centres continue to
increase which implies that our performance in the RMI sector is currently
better than new build.



NATURAL STONE DIVISION

This is the first year we have disclosed separately the results for this part of
our business.  It includes our own natural stone products, imported stone paving
and granite products and crushed aggregates sold from our own quarries.

In the full year, sales of this new Division amounted to £25 million, an
increase of 27 per cent over 2001.  These figures include a full year
contribution from Stancliffe Stone, acquired in June 2001.  Organic growth in
sales was 14 per cent.



EMERGING BUSINESSES DIVISION

The sales of this Division now exclude natural stone and related products which
are reported separately.  Sales for the full Division amounted to £32 million in
the year.  Only eleven months sales of the Flooring business are included
because, on 29 November 2002, we sold the business to Hanson Building Products,
as we did not see the prospect of Marshalls establishing a major market presence
in this sector.  Sales proceeds were £13.1 million, and in addition, we will
receive the excess of the proceeds from the collection of debtors over the
payment of creditors.  The sales from the remaining Emerging Businesses, on a
like for like basis, increased by 13 per cent.



BOARD

Michael Stacey, one of our Non-Executive Directors, who has reached the end of
his three year term has resigned, effective today, from our Board.  He had also
recently resigned from another PLC of which he has been a Non-Executive Director
in order to pursue opportunities in the private equity market.  His contribution
to our business will be missed and we will be seeking a replacement.



CHAIRMAN'S COMMENT

Christopher Burnett, Chairman said 'In what has been an interesting and
challenging year in terms of trading conditions, it is pleasing to have again
achieved record sales and to have the expectation of reporting record profits
when we announce our 2002 results in March 2003.  We have entered the new
financial year with good domestic order books and, while the belief is that
general economic conditions are going to be more difficult in 2003, the
prospects for the UK construction industry are encouraging, backed by Government
spending plans.  With this in mind, and the developments we have in place for
all our Divisions, we are looking forward to another successful year.

In 2002, Marshalls enjoyed its sixth year of continued sales and profit growth.
Marshalls today comprises a group of strong, focussed and complementary
businesses and is in extremely good shape, with a very strong balance sheet and
leading market positions in a number of growing markets.  It is therefore my
wish, by the end of 2003, or as soon thereafter as possible, to step down as
Chairman of the Group.  It remains my objective to tackle one more corporate
turnaround or transformation before hanging up my running shoes and I want the
time to find that opportunity and then meet such a challenge.

In the coming months, I will be working with the Board to put in place the
appropriate executive management and Board structure to continue to deliver
shareholder value following my departure.  Only when this has been achieved,
would I step down from the Board.'

The preliminary results of the Group will be announced on Friday 7 March 2003.



Enquiries:
Christopher Burnett          Chairman                          01422 306400
Ian Burrell                  Finance Director                  01422 306400

Jon Coles                    Brunswick Group                   020 7404 5959
William Cullum               Brunswick Group                   020 7404 5959


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