Marshalls: 400 jobs at risk as sales fall 27%

West Yorkshire-based natural stone and landscaping products firm Marshalls plc said in a trading statement on Wednesday that its sales in the four months through April 30 were down 27% at £131 million as a result of the impact of the Covid-19 crisis.

The Elland-based firm said about 400 jobs are now at risk at the company.

“Sales activity took a steep drop in the last week of March and throughout April,” said Marshalls.

“However, in the early part of May we have seen daily levels of activity progressively improve and we are currently at circa 50 per cent of our daily revenues compared to the same period in 2019.”

Marshalls added: “We have now taken further steps to restructure the group’s operations.

“We have entered into consultations with employees across the group as part of a series of restructuring proposals that cover all parts the business.

“These proposals include selective site closures, changes in shift patterns and proposed changes to the size of and structure of support functions.

“There are potentially up to 400 positions representing 15 per cent of Marshalls total workforce, that may be impacted as a result of these proposed changes.

“We are reopening our plants as demand returns.

“The nature of the concrete manufacturing process means our facilities have low re-start time and cost requirements.

“This flexibility and our improved efficiency means that capacity will not be materially reduced by the proposed changes and we will continue to satisfy our customers’ requirements.

“We are taking all appropriate steps to support the long-term interests of the business, its employees and other stakeholders.”

On its bank facilities, Marshalls said: “Further to the announcement on 14 April 2020, the group has now signed final agreements with each of NatWest, Lloyds and HSBC for an additional £30 million, 12 month committed revolving credit facility with each, with a 12-month extension option.

“These additional facilities comprise £90 million and significantly strengthen the group’s headroom.

“Including these additional facilities, Marshalls now has total bank facilities of £255 million of which £230 million are committed. 

“As at 30 April the group had net debt of £69 million, on a pre-IFRS 16 basis …

“In addition, Marshalls plc has been confirmed as being eligible for the Covid Corporate Financing Facility (CCFF) with an issuer limit of £200 million.

“We have now completed the processes and documentation to establish a commercial paper programme under this scheme and are able to access the liquidity available to us under this facility. 

“The board considers that the facilities now available to the group, both from its enhanced bank facilities and its CCFF commercial paper programme, are sufficient to meet significant downside liquidity scenarios over a prolonged period.”

In its outlook, Marshalls said: “We are closely monitoring cash flows to ensure that the business is in a strong position for eventual recovery …

“At this time, it does not remain possible for the group to provide an accurate assessment of trading for the current year and accordingly all previous market guidance continues to be withdrawn …”

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