Contingency plans help Marshalls

MARSHALLS, the paving specialist and landscape products group, said it was continuing to focus on driving sales, cost reduction and cash generation as trading conditions continued to be tough.

The Huddersfield-based firm, which earlier this year raised £34m through a rights issue, said that revenue for the 10 months ended October 31 was close to expectations at £277m from three fewer working days compared to £339m for the same period 2008.

Underlying daily sales revenue on a like-for-like basis was down 17% while sales to the public sector and commercial market, which represent around 57% of Marshalls’ sales, were down 18%.

Sales to the domestic market were down 15% compared to the prior year.

Marshalls said reductions in stock and capital expenditure were continuing and that a temporary ‘lay off’ had been put in place, which if required would reduce costs while significantly reducing the need for further redundancies.

The firm, which is a sponsor of the Chelsea Flower Show, also announced that subsidiary Marshalls Group will redeem £20m in debenture stock.

The redemption is prior to its maturity date and will enable the business to benefit from a lower interest cost in the short to medium term.

“Marshalls continues to balance short term performance with the need to maintain its market leading operating capability,” it said in a statement.

“The remaining manufacturing plants have a good geographical spread, are efficient and well invested. In addition, the business has retained the ability to increase output when demand improves without requiring any significant capital expenditure.”

It continued: “Marshalls continues to invest selectively to build on its leading position in its core markets, its strong brand, its efficient manufacturing and sourcing infrastructure and its extensive national logistics network to ensure the business is well positioned for when markets improve.”