Earnings and forecasts disappoint at building materials firm Marshalls / Image source: Adobe
  • New-build and RMI markets weak
  • No sign of a recovery in 2024
  • Final dividend cut by 42%

After a 50% rally in its shares over the last six months or so, FTSE 250 building materials firm Marshalls (MSLH) delivered a disappointing set of results for 2023, cut its final dividend and warned 2024 wouldn’t be any better.

The shares dropped 12% out of the gate to 256p but recovered marginally to trade down 10% at 261p by mid-morning.


The construction materials industry had it tough in 2023, as rising inflation and successive rate increases in the first half together with uncertainty over the economy led to reduced demand both for new houses and for renovations.

The Construction Products Association estimates UK construction output fell by 6.4% last year, with infrastructure in positive territory but new build housing posting a 17% decline and private housing RMI (repair, maintenance and improvement) showing an 11% contraction.

As a result, Marshalls, which is exposed to all three markets, registered a 7% decline in revenue to £671 million but profitability suffered meaning operating earnings were down 30% to £70.7 million and earnings per share were down 47% to 16.7p from 31.3p the previous year.

The firm cut its final dividend by 42% from 9.9p to 5.7p, meaning the total dividend for 2023 fell by 47% from 15.6p to 8.3p per share.


The firm took action to try to right-size the business by exiting the Belgian market, delivering a small saving in operating expenses and reducing its gearing, which stood at 1.9 times EBITDA (earnings before interest, tax, depreciation and amortisation) at the end of December.

‘During 2023, the business was necessarily focused on controlling and improving the efficiency and agility of its cost base, leveraging its strength in operations, as well as rigorous and strong management of cashflow’, said recently-appointed chief executive Matt Pullen.

Pullen acknowledged however that while the firm had expected markets to remain weak in the first half of the year followed by a progressive recovery in the second half, ‘this recovery is (now) expected to be slower and more modest than previously anticipated’.

Revenues will therefore miss its previous forecasts, and profits are unlikely to recover from 2023’s level.


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Issue Date: 18 Mar 2024