Analysts warn 2023 profit could be 25% below previous forecasts
Building products firm Marshalls is cutting 250 more jobs on top of 150 it axed last year as the slowdown in the housing sector continues to hit suppliers in the sector.
Last week, brickmaker Forterra said housing’s woes had hit its revenue and profit in the first of the year and now Marshalls has warned that its performance in the second half of this year will be below expectations with broker Investec warning full year profit could be 25% below previous forecasts.
It admitted: “Whilst previously anticipating a recovery in market conditions in the second half of the year, the Board is now of the view that an improvement in the second half performance is unlikely given the macro-economic backdrop.”
In a trading update ahead of its half year results next month, the firm said it was closing its factory in Carluke in Scotland, reducing shifts at its other sites and paring back its commercial team.
“Regrettably, these changes are expected to result in a reduction of approximately 250 roles in addition to around 150 roles that were removed in the second half of 2022,” it said.
The firm said the changes would save around £9m annually while it was also selling off land it doesn’t need.
It said revenue for the half year to June would be up 2% to £354m but pre-tax profit is expected to be down a quarter to £33m when it publishes its interim results on 16 August.
Marshalls said its landscape business had been hit by the slowdown in new build housing with income down 20% to £174m while revenue from Marley Roofing Products, bought last year for £535m, was down 7% to £93m in the first half.
In its 2022 results, Marshalls said revenue was up 22% to £719m with adjusted pre-tax profit up 23% to £90.4m.