Revenues down at building supplies group amid subdued demand

Revenues are down 7% to £671m at Elland building supplies firm Marshalls amid reduced demand from housebuilders and repair and maintenance.

In a full-year trading update issued this morning the firm said its landscape products division’s revenues were down 18% to £321m, with building products down 12% to £170m and its Marley Roofing Products revenue down 9% to £180m.

Marshalls, which announced last month that former Genuit Group chief operating officer Matthew Pullen would take over as chief executive from Martin Coffey on 1 March,  said it expects pretax profits to be in line with expectations. It will announced its full-year results on 18 March.

The firm  has continued with cost-cutting measures including mothballing factories, reducing shifts and capacity, and reorganising commercial and support functions. which have delivered annual savings of £11m.

It has disposed of surplus land, earning £7m, and focused on working capital efficiency and cash management to reduce its debt. with leases down to £172m from £191m in December 2022, and its term loan reduced by £30m to £180m. It has not drawn on a £160m revolving credit facility.

“Management balanced the need to reduce capacity and the cost base in the short-term while retaining the flexibility to increase production when demand recovers,” the firm said in its update. “The group has significant latent capacity across all its businesses to satisfy materially higher demand than current levels.”

The firm said its market position remained strong. “Notwithstanding the anticipated short-term challenges, the Board remains confident that the long-term market growth drivers and a focus on executing key strategic initiatives, will underpin a material improvement in profitability when markets recover,” it said in  its statement. “The board is encouraged recently by the more positive inflation trends and the consequent impact on interest rate expectations, which should support progressive improvements in the Group’s end markets during 2024.”