Marshalls defiant despite a drop in sales
PAVING specialist Marshalls said that it sees its longer term prospects as “good” thanks to its reputation and “decisive actions” on cost reduction despite challenging trading conditions.
It’s a defiant message from the Huddersfield-based firm as it reports revenue for the year ended December 31 was down 6% at £378m (2007: £403m).
Sales to the public sector and commercial market, which represent around 59% of Marshalls’ sales, were 1% ahead while sales to the domestic market were down 15%.
Based on contract awarded data, the outlook for 2009 in the public sector remains positive but demand has weakened in the commercial and industrial sectors with projects being delayed or cancelled as economic conditions have deteriorated.
In the domestic market installer order books from the latest survey at the end of October 2008 were 6.4 weeks – down from 8.2 weeks in June 2008.
Marshalls said that as a result of an “uncertain market” it was aiming to retain a balance between cost reduction, conserving cash and maintaining the capability of the business for the medium term.
The Chelsea Flower show sponsor’s strategy includes focussing its efforts on market sectors where activity is more robust.
The manufacturer is also “selectively” continuing to invest in “innovation” to reduce operating costs and extend its competitive advantage through new product development and services.
Last year it completed the acquisition of a further natural stone paving and walling business in South Wales for £5m and made an investment in a further Cotswold Limestone business taking acquisition and investment for the year to £7m.
Closures were also completed at its concrete manufacturing operations in Cannock in the West Midleands and Sawley, which released £5m from stock.
It confirmed that discussions to close up to two further concrete manufacturing operations had already started.
The future also looks uncertain for Premier Mortars, which supplies ready-to-use mortar to the house building market and Compton, which supplies pre-fabricated garages.
“These businesses have been particularly affected by the deterioration in current market conditions and the short term outlook remains challenging,” Marshalls said.
“The board considers it appropriate to make a non-cash impairment provision of £9m which covers the full amount of goodwill for these businesses.”
Established in the late 1880s, Marshalls is one of the UK’s leading manufacturer of superior natural stone and innovative concrete hard landscaping products, supplying the construction, home improvement and landscape markets.
The group operates its own quarries and manufacturing sites throughout the UK, including 10 regional service centres and two national manufacturing and distribution sites.
It has undertaken some prestigious projects over the past years including supplying stone paving for Trafalgar Square in London.
