The firm’s South Yorkshire plant will shut in the coming months with capacity reductions in other regions resulting in one-off charges of £2.5m.

Capacity reduction measures taken during the first half of the year cost the company £6.6m and resulted in a £10.8m pre-tax loss during the six months to June 30 2012 compared to a £12.2m profit last time.

A drop in demand saw turnover fall to £167.5m from £177.2m.

Graham Holden, Chief Executive, said: “The operational restructuring initiatives the Group has taken are in direct response to the weaker market outlook.

“The actions taken set underlying capacity and the cost structure at a sustainable level for the lower volumes forecast and enable Marshalls to create its own operating certainty.

“Despite the weakness in the economy Marshalls continues to strengthen its market position and there has been an improvement in underlying trading margins.

“The Group’s growth initiatives are progressing well and sales effort is being reallocated to move these forward more quickly. Marshalls has strong operational flexibility.

“The cost reduction initiatives, targeted growth plans, strength of the installer order book, resilience of the commercial end market and the opportunities created by the Group’s International growth strategy should continue to mean that Marshalls is well placed to outperform the market and achieve good growth when market conditions improve.”