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Fox Marble no longer a fox on the run

Has Fox Marble finally turned the corner? Recent news flow has been positive and Mother Nature seems to have taken the company off her hit list
Marble lobby
You too can have a lobby like this if you order your marble from Fox Marble

Fox Marble Holdings PLC's (LON:FOX) chief executive Chris Gilbert would be among the first to say the company has a chequered past.

He's always been confident of the top-notch quality of the marble in the quarries that the company operates in Kosovo and Macedonia, but has maybe underestimated the challenges the company would face in its early years.

Challenges such as terrible weather; a fire at one of its equipment supplier's factories; and the Brexit vote putting a brake on the top end of the London housing market.

Recent news flow has been positive, though, and the company's patient shareholders were rewarded with a 40% hike in the share price in 2017.


A quick laundry list of milestone deals provides plenty of reasons to be cheerful.

READ: Fox Marble bags first significant Turkish customer

READ: Breakthrough deal in India for Fox Marble

READ: Fox advances to Mayfair

The order from Turkey prompted the company to revise up its estimated order book for 2017 from €4.1mln to €4.4mln, which should be recognised as revenue in the current year.

To put that into perspective, in 2016 the company's sales totalled €801,040.

The brand's reputation is growing and the marble processing plant is now up and running​

Gilbert believes the orders demonstrate the reputation of the Fox Marble brand is growing, as it establishes a track record of effective production and distribution of high-class marble.

Meanwhile, the long-awaited factory in Kosovo finally came on stream in July. Fox Marble's factory is the first marble processing plant in the country and it means the company will no longer have to send slabs off to Italy – which seems to be the centre of the marble world – for processing. The net result is an improvement in margins for Fox Marble, and it will also give the company lots of flexibility in terms of the supply chain.

“It also increases yield. We can now process smaller bits of marble that was not economical to ship, so yields per tonne will rise – not that we’re short of marble,” Gilbert told Proactive Investors.

In October, the company completed the first sale of polished marble slabs from its factory in Lipjan, Kosovo. 

The material was purchased by Marble Dino, a division of a large, local construction company in Kosovo.

Fox Marble has four quarries in operation: Cervenillë, Syriganë and Malishevë in Kosovo and Prilep in Macedonia. 

Together these produce nine varieties of stone.

During 2015 and 2016 the focus was on opening new benches in all of the quarries in order to achieve more consistent and increasingly high-quality output. 

Turning the bulging order book into sales​

More recently, the focus has been on converting its burgeoning order book into sales. in August, it signed a deal to establish a new distribution outlet for its marble products in the United States. In November, it announced it had made further shipments to Turkey under its agreement with Simsekler Mermer.

To date, the company has shipped more than €200,000 of marble to Simsekler under the agreement signed in April of this year for the Turkey-based natural stone group to take at least €400,000 worth of marble from Fox Marble.

Also in November, Fox Marble shipped and received payment on an order from Granite Planet, a company based in Michigan. Granite Planet is in the process of ordering two further containers this month and has indicated an intention to purchase a further six containers of marble prior to the end of 2017.

2018 started on a bright note, with Fox pencilling a sales and purchase agreement covering the Gulf Cooperation Council (GCC) nations.

The three-year agreement with Shailesh Patil is subject to a minimum commitment of 3,000 tonnes of marble a year and confers upon Mr Patil the exclusive rights to sell Fox Marble's product in Oman, Qatar, Saudi Arabia, Bahrain, Kuwait and the United Arab Emirates.

Fox Marble said the minimum commitment under the agreement equates to roughly €600,000 to €800,000 a year. Patil's company, Kesari Tours, also agreed to support a financing by Fox Marble that will allow the company to repay debt obligations and provide some cash to support the planned expansion of its production capacity to meet growing demand.

The company expects to raise £759,750 by placing shares at 10.5p a pop; a further £2mln or so through a share subscription at the same price to Kesari Tours; and £235,000 through the issue of convertible loan notes.

The issue price was a small discount to the prevailing share price and it is, perhaps, a testament to growing confidence in Fox Marble that the share price was unchanged on the morning of the fund-raising announcement.

Mistakes have been made but it has been a while since Fox Marble put a foot wrong​

Its worth noting that Fox Marble was only formed in 2011. In many respects, it has come a long way, but a combination of over-promising, acts of Mother Nature and the unpredictable climate has created a situation where it now really needs to start delivering.

Revenue in 2016 rose to €801,040 from €229,242 the year before, but chairman Andrew Allner conceded this was “far below” management’s expectations, as some prospects in the pipeline took longer to convert into firm orders while volumes on some closed contracts were not as high as anticipated.

Average selling price per tonne rose to €574 from €357 the year before.

The loss narrowed to €2.76mln from €3.03mln in 2015.

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Fox Marble Holdings PLC Timeline

April 14 2015

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