Facing a decline in demand, Marshalls has closed its factory in Carluke, reduced shifts and capacity in other facilities and restructured its commercial team.
The Carluke factory in Lanarkshire was acquired in 2005 when Marshalls bought Paver Systems and its associate company, Jamestown Stone & Concrete.
The rationalisation means a further 250 job losses across the group, on top of the 150 that went in the second half of 2022.
These actions are expected to save £9m a year, including about £4m this year.
The Marshalls board has also ordered a reduction in capital expenditure plans and the disposal of surplus land as it seeks to reduce its £185m debt.
Marshalls, famous for its paving blocks, acquired roof tile manufacturer Marley for £535m last year. However, with the house-building and private repair & maintenance markets in decline, expectations are not yet being met.
In a trading update today, the Marshalls board said that it expects to report group revenue for the six months to 30th June 2023 of £354m, which is 2% higher than last year’s £348m. But the 2022 number includes only two months of Marley. On a like-for-like basis, Marshalls’ revenue fell by 13% in the first half of this year. Adjusted profit before taxation for the half year is expected to be around £33m, compared to £45m last time.
“The sustained high levels of inflation, increasing interest rates and weak consumer confidence means that the board anticipates the group's performance in the second half will be below its previous expectations,” the board said.
Marshalls Landscape Products has seen revenue shrink 18% compared to 2022 on a like-for-like basis; Marshalls Building Products shrank 9%.
Marley Roofing Products saw mixed demand across its product offering. Viridian, the integrated solar panels business, saw growth but regular tiles saw demand fall with the house-building slowdown. Overall, therefore, Marley’s sales were down 7% compared to 2022 on a like-for-like basis.
Warning on full-year profits, the board said: “Whilst previously anticipating a recovery in market conditions in the second half of the year, the Board is now of the view that an improvement in the second half performance is unlikely given the macro-economic backdrop. In addition, the board has chosen to reduce production volumes with a negative impact on operational efficiency in order to manage working capital. Taking these factors together, and in the absence of a recovery in demand in the group's end markets, the board believes that the result in the second half will be markedly weaker than the first half, and consequently expects to deliver a result for the full year that is lower than its previous expectations.”
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