Summer weather rained on Marshalls’ revenues

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The dismal summer weather hit paving specialist Marshalls, which has reported a 6 per cent fall in revenues in the first ten months of the year.

The Huddersfield-based company said in an update to the stock exchange yesterday that revenue was £279m for the ten months ending October 31, 2012, down from £298m during the same period in 2011.

Graham Holden, chief executive, said the figures were in line with expectations, adding: “The particular impact for us in the first half of the year was the heavy rain, from April through to July, which, as our products are installed outside, inevitably slows things down. Since then, things have improved a little over the summer. It’s not been a scorcher but it’s been okay for installations, which has helped a little bit.”

The business said its residential division, representing around 32 per cent of group revenues, saw a 13 per cent decline in sales. Sales to the public sector and commercial market, which represents around 63 per cent of Marshalls’ sales, were down 4 per cent. The group said its international business “continues to make progress” and is approaching 5 per cent of group sales.

Mr Holden said that restructuring measures previously announced by the company have now been completed, with the group now employing about 2,050 people. Earlier this year, Marshalls closed its Maltby paving plant in South Yorkshire, with 50 job losses. That followed the closure of a plant in Derbyshire and capacity taken out across the business.

“The action taken is to prepare for what we think the outlook is going to be next year and we effectively set the business up to operate in these more difficult conditions. Hopefully, that’s the end of the action now and we can just weather the storm and then look to grow again when market conditions improve,” said Mr Holden.

The group said: “Marshalls’ targeted growth initiatives continue to deliver encouraging results and the operational restructuring... is being implemented successfully and delivering the expected benefits.”

Analysts at Panmure Gordon & Co said Marshalls has had “a tough few months with the extreme wet weather”. But added: “There are reasons to be encouraged though: the order book remains healthy, international sales continue to improve and the cost cutting programme is delivering encouraging results.”