Marshalls: Building materials firm warns over ‘slower’ recovery

In order to help reduce its costs, Marshalls said it closed and mothballed factories and reduced shifts in other facilities in 2023, in a move which cut 330 jobs during the year.

The group said this has helped the business save £11m a year.

Bosses said the company will continue to come under pressure from the weak market, as developers slow down their building work.

The company said revenues in the first two months of 2024 were lower than over the same period in 2023 as weak conditions continued.

As a result, it said sales for the full year are set to be “lower than expected” and profits are now expected to remain roughly flat.

In the stock market update, Marshalls revealed that adjusted pre-tax profits slid by 41 per cent to £53.3m in 2023 compared with the previous year, as it was knocked by the slowdown in the construction sector after interest rates increased.

It also revealed that revenues declined by 7 per cent to £671.2m for the year.

Matt Pullen, chief executive, commented: “During 2023, the business was necessarily focused on controlling and improving the efficiency and agility of its cost base, leveraging its strength in operations, as well as rigorous and strong management of cashflow. All of the actions taken demonstrate the business is well managed and agile.

"I would like to thank all my colleagues for their hard work and commitment throughout last year.

“I have been with the group since early January and these first two months have reinforced my view of both the strengths of the business and the significant opportunity to deliver profitable growth and create shareholder value.

"Over the coming months our focus will be on evolving the existing strategy, with a focus on the medium and longer-term market opportunities related to climate mitigation and adaptation and the structural drivers that will fuel demand for the group’s products and solutions.

“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.

"This recovery is however expected to be slower and more modest than previously anticipated. 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.”