Revenues down at building products group as cost cutting measures completed

Elland-headquartered Marshalls, which makes products for the built environment, says its group revenues contracted 12% on a like-for-like basis in the nine-month period ended 30 September 2023.

It delivered revenues of £528m (2022: £544m), which is 3% lower than the corresponding period in 2022 and includes the contribution of four additional months of revenue from Marley Roofing Products – which Marshalls acquired last year.

Marshalls’ landscape, building and roofing product divisions all recorded negative growth on a like-for-like basis.

But the group says its balance sheet remains robust, with pre-IFRS16 net debt of about £190m at the end of September (September 2022: £222m; June 2023 £185m).

Marshalls says its management have taken “decisive actions” to improve agility and right-size the business through cutting capacity and costs and maintaining a disciplined approach to cash management.

This involved the closure of a factory, a reduction in shifts and capacity in other facilities, and a reorganisation of Marshalls’ commercial team focused on simplifying the business.

It says these actions were largely concluded by the end of the third quarter and are expected to deliver annualised savings of around £9m.

The group’s update adds: “Importantly, management has balanced the need to reduce capacity and the cost base in the short-term while retaining the flexibility to increase production when demand recovers.

“Management continues to review opportunities to improve efficiency without compromising longer-term capacity flexibility.

“The group has latent capacity across all its businesses that can satisfy materially higher demand than that being currently experienced.”