Marshalls revenue falls 7% to £671m as demand slows

Marshalls plc, the Elland, West Yorkshire-based stone and landscaping firm, said its group revenue for the year ended December 31, 2023 was £671 million — a year-on-year reduction of 7% including the benefit of an additional four months of trading from Marley.

On a like-for-like basis, group revenue contracted 13%.

“This performance reflects lower demand from house builders and continued subdued activity in private housing RMI (repair maintenance and improvement)… ” said Marshalls.

In a full year trading update, Marshalls said: “The group’s performance in the period since the trading update on 18 October 2023 has been as anticipated and the board expects adjusted profit before tax for the full year to be in-line with its expectations …

“Marshalls Landscape Products’ revenue was £321 million (2022: £394 million), which represents a reduction of 18 per cent. 

“On a like-for-like basis, after adjusting for the disposal of Marshalls NV in April 2023, revenues contracted by 16 per cent. 

“Marshalls Building Products’ revenue was £170 million (2022: £193 million), a reduction of 12 per cent. 

“Marley Roofing Products’ revenue was £180 million (May to December 2022: £132 million), which represents a reduction of nine per cent on a like-for-like basis.”

The firm said that during the year its management took decisive actions “to improve agility and right-size the business through reducing capacity and costs.”

This included the closure or mothballing of factories, a reduction in shifts and capacity in other facilities, and a reorganisation of commercial and support functions. 

“These actions are expected to deliver net annualised savings of around £11 million, which is £2 million higher than previous estimates,” said Marshalls.

“In addition, management reviewed and reprioritised capital expenditure plans, executed a programme of surplus land disposals that generated around £7 million, and focused on efficient working capital and cash management to reduce the group’s net debt.

Importantly, management balanced the need to reduce capacity and the cost base in the short-term while retaining the flexibility to increase production when demand recovers.

“The group has significant latent capacity across all its businesses to satisfy materially higher demand than current levels.”

In its outlook, Marshalls said: “Execution of the group’s strategy is underpinned by our strong market positions, established brands and focused investment plans to drive ongoing operational improvement.

“Notwithstanding the anticipated short-term challenges, the board remains confident that the long-term market growth drivers and a focus on executing key strategic initiatives, will underpin a material improvement in profitability when markets recover. 

“The board is encouraged recently by the more positive inflation trends and the consequent impact on interest rate expectations, which should support progressive improvements in the group’s end markets during 2024.”