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Marshalls profit slumps 30%; 2024 outlook looks gloomy

16th Aug 2023 07:59

(Alliance News) - Marshalls PLC on Wednesday lowered its interim dividend, as profit slumped by 30% amid a challenging trading environment.

In the six months ended June 30, Marshall reported revenue of GBP354.1 million, up from GBP348.4 million a year earlier.

It said that this includes the benefit of an additional four-month contribution from the acquisition of Marley Group PLC. Marshalls bought pitched roof system manufacturer Marley for GBP535 million in April 2022.

But, revenue growth was offset by the impact of the weaker macro-economic environment on market demand, it noted.

The West Yorkshire, England-based company makes landscape products such as paving stones, as well as building and roofing products. Higher interest rates reduce building construction and repair activity.

Pretax profit plummeted 30% to GBP16.7 million from GBP27.3 million.

"Market conditions in new house building and private housing RMI were challenging in the first half of the year, which led to a material reduction in volumes across all three of our reporting segments. This resulted in a significant decline in group profitability compared to the first half of 2022," Chief Executive Martyn Coffey explained.

Based on this, Marshalls lowered its interim dividend by 54% to 2.6 pence from 5.7p.

Looking ahead, Marshalls said the challenging trading environment is expected to persist in the second half of the year and into 2024.

"Against this backdrop, the board will continue to focus on actions to minimise cost, improve agility and control cash flows alongside ensuring that the business is well positioned to respond when the group's end markets start to recover. The board remains confident that these actions, together with the long-term market growth drivers and a focus on executing key strategic initiatives, will underpin a material improvement in profitability when market conditions normalise," Marshalls said.

In July, Marshalls had warned that it expects the second half of 2023 to be below its previous expectations, meaning that the full year will follow suit.

It had also announced plans to cut about 250 jobs. This adds to the 150 roles removed in the second half of last year and is expected to result in annualised savings of about GBP9 million, with 40% of this being realised in 2023.

By Sophie Rose, Alliance News reporter

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