Marshalls warns of ‘subdued’ building sector as it reveals 41% slump in profits

By Staff

The company said it closed and mothballed factories and reduced shifts in other facilities in 2023, in a move which cut 330 jobs during the year

Building materials company Marshalls has says its industry might be more “subdued” and recover slower than expected in the first half of 2024.

The firm recently revealed a drop in revenue and profits for 2023 and lowered its predictions for this year. To cut costs, Marshalls said it had shut down some factories and cut 330 jobs last year, which will save the company about £11 million annually.

Leaders at Marshalls believe the challenging market will continue to weigh on the business as developers scale back their development projects. Their new chief executive Matt Pullen said: “In the short term, markets are expected to remain challenging, with continued weakness in the first half of the year followed by a progressive recovery in the second half as the macro-economic environment improves.”

However, he added: “This recovery is however expected to be slower and more modest than previously anticipated.” Marshalls disclosed that sales in the first couple of months this year were lower than the same period last year due to these weak conditions.

So, the company predicts the whole year sales to be “lower than expected”, and forecast profits to stay more or less the same. Its profits before tax went down by 41% to £53.3 million in 2023. The industry as a whole was hit by the downturn that resulted following interest rate rises.

Revenues decreased by 7% to £671.2 million for the year. Mr Pullen said: “The board remains confident that actions taken to improve efficiency and flexibility, together with a more diversified and resilient portfolio, have strengthened the group.”

“With clear long-term structural growth drivers and attractive market growth opportunities, the group is well positioned for relative outperformance in the medium term, and this will underpin a material improvement in profitability as end markets recover.”

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