Drop in domestic demand drags down Marshalls profit

Grant Prior 2 years ago
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Marshalls has seen a significant split in its business with building products powering ahead while demand from private customers softens.

Group revenue for the nine months ended 30 September 2022 increased to £544m from £453m boosted by the £535m acquisition of roofing specialist Marley earlier this year.

On a like-for-like basis group revenue growth was 4% with a positive performance at Marshalls Building Products and Marley partly offset by the continuation of tougher trading conditions in Marshalls Landscape Products.

Marshalls Building Products saw revenue growth of 22% to £149m from £123m in the nine-month period with a strong performance from the Bricks & Masonry business.

Marley delivered revenue of £84m in the post-acquisition period which represents growth of nine per cent compared to the corresponding period in 2021. 

Marshalls Landscape Products continued to face tough trading conditions and reported revenue down to £311m from £330m with the rate of contraction increasing in the third quarter to 16 per cent compared to one per cent at the half year, due to a marked softening of demand for private housing RMI.

Marshalls has reduced its manufacturing output to manage inventory levels in a bid to reduce annual operating costs by around £10m from the start of 2023.

The firm said: “We continue to effectively mitigate cost inflation through price increases. 

“However, taking into account the combined impact of the accelerated rate of revenue contraction in Marshalls Landscape Products in the third quarter and the reduction in efficiency resulting from lower manufacturing output in this reporting segment, the Board now anticipates that the outturn for the Group as a whole will be slightly below the bottom end of the current range of market expectations of between £95.1m to £101.0m.”

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