Profits fall at building products group amidst tough trading conditions

Marshalls, which makes products for the built environment, has seen its adjusted pre-tax profits drop 26% to £33.2m in its results for the half year ended 30 June 2023.

Revenues grew by just 2% to £354.1m compared to 2022, including an additional four-month contribution from the group’s acquisition of Marley. Revenue contracted by 13% on a like-for-like basis.

As previously reported, the business has shed about 250 jobs as it looks to keep on top of costs.

Martyn Coffey, chief executive of Elland-based Marshalls, said: “Market conditions in new house building and private housing repair, maintenance and improvements (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. 

“We have responded by taking action to improve our agility, reduce capacity, take cost out of the business, and manage cash. Regrettably, these actions necessitated in a reduction of approximately 250 roles across the organisation. 

“However, we have been careful to ensure that we have sufficient latent manufacturing capacity that will allow us to respond quickly when there is an improvement in market conditions.”

Marshalls says the steps it has taken to streamline manufacturing capacity and its cost base have resulted in £9m worth of annualised savings. Around 40% of this benefit is being delivered during 2023.

The group has exited its Belgian operations, allowing it to focus on the UK construction market.

Marshalls says it expects the difficult trading environment to persist in the second half of the year and into 2024.