Marshalls warns of uncertainty as division to close

Shares in the Huddersfield-based group climbed 2.25p to 110.50p, a 2.08 per cent increase.

The group also revealed it is closing its loss-making garage and greenhouse manufacturing operations, likely to result in more than 90 job losses.

Marshalls, which specialises in products ranging from natural stone paving to bollards, said underlying sales for the first six months of the year were up nine per cent on the same period in 2010 at £177m.

Sales to the public and commercial sector, which make up about 60 per cent of its business, were up 10 per cent. Sales to households were up eight per cent.

Finance director Ian Burrell said the results were helped by consistently good weather over the six months, compared with the heavy snowfall in January and February 2010. But he added even after this impact, the group performed strongly thanks to its own self-help measures.

The group’s sales tactics have been overhauled, and increasingly it is cross-selling products from across its range.

“A lot of the initiatives that we’ve been working on are nicely feeding through,” he said. “In the commercial areas we’re getting real benefits from offering the one-stop shop.”

Marshalls added indicators for the public and commercial sectors remain “mildly positive”, but its domestic market has slowed slightly of late. Domestic installers’ order books – a key measure of household demand – stood at seven weeks at the end of June compared with 7.1 weeks at the end of April.

“The first half has been very good,” said Mr Burrell. “But on the wider economic signs there’s a reasonable amount of uncertainty. We’re just keeping people’s feet on the ground.

“The domestic market has been a bit more subdued.

“With the public sector we’ve got to believe that this is going to slow down a bit.”

Marshalls’ garage and greenhouse brands have been sold, and Mr Burrell said it is consulting with affected staff in the Midlands.

Marshalls ended the first half with net debt of £71m, up on £67m a year ago.