- Marshalls said its first-half adjusted operating profits declined by 19% to £34m
Marshalls profits fell sharply in the first half of 2024 with subdued demand in its landscaping business, amid a wider construction slowdown.
The building materials company said its adjusted operating profits declined by 19 per cent to £34million in the six months ending June.
Turnover fell by 13 per cent to £306.1million as its landscape products segment was impacted by weaker demand for new-build housing and lower spending on private property renovations.
Lower earnings: Building materials company Marshalls said its adjusted operating profits declined by 19 per cent to £34million in the six months ending June
Higher interest rates and cost-of-living pressures have diminished the appetite among Britons for home upgrades and purchases over the past two years.
It also remains significantly affected by stringent UK planning rules making it harder to construct large-scale housing developments.
Yet Matt Pullen, chief executive of Marshalls, said he was ‘cautiously optimistic’ of a rebound in end markets during the second half of 2024, dependent on ‘progressive improvement in the macro-economic environment’.
As a result, the Yorkshire-based company believes its annual profits and net debts will be ‘broadly in line’ with its prior forecasts.
The Bank of England recently lowered the UK base rate by 0.25 percentage points to 5 per cent, its first reduction for over four years, after the UK inflation rate hit its 2 per cent target.
Many lenders, such as NatWest, Virgin Money, and Leeds Building Society, reacted by slashing their mortgage rates for homebuyers.
Marshalls heavily benefited during the lockdown period when low borrowing costs and lockdown curbs led Britons with extra savings to spend more money refurbishing their properties.
Trading was further spurred by a stamp duty cut, the rise of working from home and demand for more spacious houses.
Mark Crouch, market analyst at eToro, said Marshalls is currently ‘facing a precarious set of circumstances, falling revenues and rising costs, in an industry struggling to get going and in desperate need of a kick start’.
He added: ‘To their credit, Marshalls has not stood still, taking decisive action, cutting personnel and slashing shareholder returns in a bid to improve efficiency and lower the company’s debt.’
Marshalls trimmed its net debt by 16 per cent year-on-year to £155.8million in the first six months of 2024, while its interim dividend was kept at 2.6 pence per share.
Marshalls shares were 1.2 per cent lower at 336p on Monday morning, although they have still risen by around 31 per cent over the past 12 months.
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