Business recently cut 250 jobs
Building products firm Marshalls has reported a drop in profit weeks after announcing fresh job cuts.
According to its half-year results for 2023, published this morning, pre-tax profit was £16.7m, 30% down on the £23.9m recorded in the same period last year.
The firm anticipates the challenging trading environment to persist through this year and into 2024 and said it was focused on minimising costs and controlling cash flow.
Chief executive Martyn Coffey said: “Market conditions in new house building and private housing RMI 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.
Marshalls recently announced it was cutting 250 jobs on top of the 150 it axed last year, a move Coffey said was “regrettable”.
“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,” he added.
“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.”
According to broker Investec, the firm’s full-year profit could be 25% below previous forecasts.
In its half year results, the firm said its action to “streamline manufacturing capacity and the cost base” would result in £9m of annualised savings for the business.
Despite the dip in profit levels, income at Marshalls was marginally up (2%) from £348m in HY22 to £354m in the first half of this year.