Marshalls PLC on Monday warned that its results of 2023 will be lower than previously expected, as it believes that second half of the year will be ‘markedly weaker’ than the first, due to weak consumer confidence and increasing interest rates in the UK.
Marshalls shares were down 7.9% at 254.44 pence in London early Monday.
The West Yorkshire, England-based company makes landscape products such as paving stones, as well as building and roofing products. Higher interest rates reduce building construction and repair activity.
Marshalls expects to report revenue of £354 million for the six months that ended June 30, up 1.7% from £348 million a year before. However, this includes four additional months of contribution from recent-acquisition Marley. On a like-for-like basis, revenue fell by 13%, Marshalls said.
Marshalls bought pitched roof system manufacturer Marley Group PLC for £535 million back in April 2022.
Adjusted pretax profit for the recent half year is estimated at £33 million, down from £45 million a year before.
Looking ahead, Marshalls said it expects the second half of 2023 to be below its previous expectations, meaning the full year will be as well.
‘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,’ Marshalls warned.
‘In addition, the board has chosen to reduce production volumes with a negative impact on operational efficiency in order to manage working capital.’
The company said it will cut about 250 jobs, adding to the 150 roles removed in the second half of last year. This is expected to result in annualised savings of about £9 million, with 40% of this being realised in 2023.
Marshalls said it also is reducing capital expenditure and selling surplus land.
The company had £185 million in net debt at the end of June, down from £191 million in December and £208 million a year ago.
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