Marshalls ‘well placed’ for future following restructure
MARSHALLS, the paving and landscaping specialist, cut its workforce by 15% in 2012 as it underwent a restructuring strategy to plan for future growth.
The Hudderfield-based group said record rainfall last year contributed to sales falling by 7% to £309.7m, of which £13m was directly attributable to the downpours.
UK domestic sales now account for 32% of the group’s sales, while sales in the public and commerical sectors are 64%, down by 6%.
Marshalls said progress was being made in extending the group’s international reach, with the business now approaching 5% of total sales.
Chief executive Graham Holden said the uncertain economic environment led to Marshalls “fundamentally” reviewing its operations.
This resulted in a programme of cost reduction and cash realisation measures. A range of actions to reduce production output, release cash and reduce cost have also been undertaken.
Mr Holden said: “Marshalls acted swiftly and decisively to reduce both production output and the cost base whilst retaining substantial operating and financial flexibility.
“Net debt has been reduced to £63.5m and the group is already close to achieving its target of two times net debt to EBITDA by the end of 2013.”
The operational restructuring initiatives included works closures and other measures such as cutting staff which have helped to reduce annual fixed costs by £7m. The restructuring has led to a one-off charge of £21.5m.
For the year ended December 31, Marshalls posted pre-tax profits from continuing operations before operational restructuring costs and asset impairments down by £3.3m at £10.4m.
Operating profit was £13.9m, down from £16.7m and earnings before interest, tax, depreciation and amortisation was £30.
Looking ahead, Mr Holden described economic conditions as “unpredictable” and said forecasts for 2013 were flat.
However, he added: “Commercial demand, particularly from rail infrastructure and home development, is improving, the installer market is showing good order books and the group’s international business is delivering strong year on year sales growth.
“Marshalls has a leading position in its markets with unrivalled geographic coverage. The group remains focused on product innovation and service delivery initiatives to deliver sales growth and improve trading margins.
“There is no change in our expectations for the current year and the group continues to remain well placed to achieve growth when market conditions improve.”
A final dividend of 3.5p per share is being recommended giving a total dividend of 5.25p for the year.
