Marshalls profits slump as business warns ‘challenging’ environment expected to persist into 2024
Building products supplier Marshalls reported a 26 per cent slide in adjusted profit before tax in its half year results, slumping to £33.2m, as a slowdown in the UK house building market continues to eat away at its earnings.
The group, which is headquartered in West Yorkshire, also said that adjusted EBITDA fell eight per cent £58.8m down from £64.2m when compared to the same period last year and adjusted operating profits fell 13 per cent.
High inflation and poor consumer confidence has led to weak trading in the residential sector.
Marshalls warned that the “challenging” trading environment is expected to persist in the second half of the year and into 2024.
The business has made efforts to streamline costs including cutting some 250 jobs earlier this year and closing a factory in Carluke, Lanarkshire in Scotland.
Marshalls said these cuts would help the business save £9m a year.
In April, the business also offloaded the Belgian market, with Marshalls noting today that the exit will help it focus on the UK construction market.
“Market conditions in new house building and private housing RMI were challenging in the first half of the year, which led to a material reduction in volumes across all three of our reporting segments,” Martyn Coffey, chief executive, at Marshalls, said.
“This resulted in a significant decline in group profitability compared to the first half of 2022. We have responded by taking action to improve our agility, reduce capacity, take cost out of the business, and manage cash.”
The bleak outlook for the UK residential sector has hindered Marshalls share price with the business trading no higher than it did in 2015.