Building supplies group warns of slower than expected recovery

Elland-headquartered building supplies firm, Marshalls, has seen its adjusted pre-tax profits fall more than 40% to £53.3m (2022: £90.4m) in its results for the year ended 31 December 2023.

The group, which says its financial performance was hit impacted by tough end market conditions, also reports revenues of £671.2m (2022: £719.4m) and adjusted EBITDA of £103.6m (2022: £136m).

Matt Pullen, chief executive, who has been with the group since early January, said: “In the short-term markets are expected to remain challenging with continued weakness in the first half of the year followed by a progressive recovery in the second half as the macro-economic environment improves.

“This recovery is however expected to be slower and more modest than previously anticipated.

“The Board remains confident that actions taken to improve efficiency and flexibility, together with a more diversified and resilient portfolio have strengthened the group.

“With clear long-term structural growth drivers and attractive market growth opportunities, the group is well positioned for relative outperformance in the medium term, and this will underpin a material improvement in profitability as end markets recover.”

Marshalls notes it has taken “decisive” action taken to slim down its manufacturing capacity and cost base, resulting in annualised savings of £11m, with around 40% of this delivered in 2023.

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

And Marshalls’ logistics function is to be outsourced to Wincanton in half one 2024, a move which is expected to improve service and deliver efficiencies.

The business forecasts its revenues in 2024 will be lower than previously expected and anticipates its profit will now be at a similar level to 2023.