Turnover for the six months to 30th June 2024 was £306.7m, down 13% from £354.1m in the same period last year. Adjusted profit before tax was £26.6m, 20% below last year’s first-half figure of £33.2m.
Group revenue reduction was driven mainly by a fall in sales of landscape products – a result of sustained low levels of new-build housing and private housing repair, maintenance and improvement (RMI) activity, the company said.
Chief executive Matt Pullen said that the impact of ‘weak end markets’ was partially mitigated by ‘decisive management actions’ and the effects of Marshalls’ diversification strategy.
“The result in the first half is encouraging and demonstrates that the strategy of diversification, building on the group’s historic core landscape products business, through the acquisition and improvement of less cyclical businesses in recent years, has resulted in a more balanced group,” said Pullen.
“In addition, we have maintained our focus on tightly controlling costs and working capital. We are, therefore, pleased to report annualised operating cashflow conversion at 111% and a year-on-year reduction in net debt of £28.8m, which remains a key capital allocation priority.”
Pullen added that the company is currently undertaking a review of group strategy and has identified “a number of opportunities to deliver outperformance over the medium term.
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“These include attractive sustainability-driven markets across bricks and masonry, water management and energy transition alongside a cyclical recovery in our core landscape and roofing businesses, supported by the new government’s commitment to increase house-building significantly.”
Marshalls’ landscape products division derives around 45% of its revenues from commercial and infrastructure markets, 30% from new-build housing and 25% from private housing RMI.
“Revenues generated from all end markets contracted during the first half of the year with demand being particularly weak in new build housing and private housing RMI,” said Pullen. “In addition, the reduction in volumes partially resulted from some loss in market share and steps are being taken to rebuild the group’s distribution points through mutually beneficial trading arrangements.”
The company’s building products business derives about 60% of its revenue from new-build housing and about 30% from commercial and infrastructure. Revenue in this market fell by 6% year-on-year due to continued weakness in new-building housing although the company’s drainage products saw a modest increase in sales.
Marshalls is planning to hold a capital markets even in November where it will provide more information on its new five-year strategy.
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