Profit warning from Marshalls highlights difficult trading conditions
Marshalls, which now includes the roofing Marley Group that it bought last year, has warned in a trading update for the four months to the end of April that group revenue contracted 14% on a like-for-like basis compared with last year.
Marshalls, headquartered in Elland, West Yorkshire, says the fall reflects the uncertain macroeconomic climate, a fall in new house building and continued weakness in private housing repair, maintenance and improvement (RMI).
Marshalls’ update says: “In the first quarter of the year, National House Building Council new housing starts were 27% lower than 2022, which had an impact on the performance of all the group’s reporting segments.
“Management have acted quickly to reduce costs in the business and are accelerating plans to improve production efficiency, while ensuring flexibility to respond when market demand improves.”
While revenue for the four months ended 30 April was £227million – year-on-year growth of 12% – that includes the contribution from Marley this year that was not there last year.
Marshalls Landscape Products experienced tough market conditions due to its exposure to new house building and domestic RMI to achieve a revenue of £110million compared with £140million in the same period of 2022 – a fall of 21%.
Marshalls Building Products delivered a revenue of £55million against £61million last year, down 9%, while Marley Roofing Products produced revenue of £61million, down 6%.
The Group says the removal of some 70 ‘indirect roles’ in the businesses will result in annual savings of around £3.5million.
It adds that it is confident it will be able to generate profitable long-term growth when market conditions improve, although for now it expects the macro-economic climate to remain challenging.