Building products supplier Marshalls warns that challenging environment is expected to persist into 2024

Elland-based Marshalls has revealed that group revenue for the six months ended June 30 2023 was £354.1m, which is two per cent higher than the same period in 2022. Group adjusted operating profit was £41.9m, which is 13 per cent lower than 2022.

Commenting on the results, Martyn Coffey, the chief executive, said:

“Market conditions in new house building and private housing RMI (repair, maintenance and improvement) were challenging in the first half of the year, which led to a material reduction in volumes across all three of our reporting segments.

"This resulted in a significant decline in group profitability compared to the first half of 2022. We have responded by taking action to improve our agility, reduce capacity, take cost out of the business, and manage cash. “Regrettably, these actions necessitated in a reduction of approximately 250 roles across the organisation.

"However, we have been careful to ensure that we have sufficient latent manufacturing capacity that will allow us to respond quickly when there is an improvement in market conditions.

“Our refreshed strategy is underpinned by our strong market positions, established brands and focused investment plans to drive ongoing operational improvement.

"Notwithstanding 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 market conditions normalise.”

The statement added: “The UK economy deteriorated progressively during 2022 driven by significant cost inflation, successive base rate increases and falling real wages, all of which put unprecedented pressure on household budgets and reduced demand for new build housing. The Bank of England has continued its cycle of tightening base rates in 2023 and gilt rates have increased due to concerns about the persistent high rate of core inflation.”