Marshalls cuts jobs as expects "markedly weaker" second half of 2023

(Alliance News) - Marshalls PLC on Monday warned that its results of 2023 will be lower than ...

Alliance News 31 July, 2023 | 7:39AM
Email Form Facebook Twitter LinkedIn RSS

(Alliance News) - Marshalls PLC on Monday warned that its results of 2023 will be lower than previously expected, as it believes that second half of the year will be "markedly weaker" than the first, due to weak consumer confidence and increasing interest rates in the UK.

Marshalls shares were down 7.9% at 254.44 pence in London early Monday.

The West Yorkshire, England-based company makes landscape products such as paving stones, as well as building and roofing products. Higher interest rates reduce building construction and repair activity.

Marshalls expects to report revenue of GBP354 million for the six months that ended June 30, up 1.7% from GBP348 million a year before. However, this includes four additional months of contribution from recent-acquisition Marley. On a like-for-like basis, revenue fell by 13%, Marshalls said.

Marshalls bought pitched roof system manufacturer Marley Group PLC for GBP535 million back in April 2022.

Adjusted pretax profit for the recent half year is estimated at GBP33 million, down from GBP45 million a year before.

Looking ahead, Marshalls said it expects the second half of 2023 to be below its previous expectations, meaning the full year will be as well.

"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," Marshalls warned.

"In addition, the board has chosen to reduce production volumes with a negative impact on operational efficiency in order to manage working capital."

The company said it will cut about 250 jobs, adding to the 150 roles removed in the second half of last year. This is expected to result in annualised savings of about GBP9 million, with 40% of this being realised in 2023.

Marshalls said it also is reducing capital expenditure and selling surplus land.

The company had GBP185 million in net debt at the end of June, down from GBP191 million in December and GBP208 million a year ago.

By Tom Waite, Alliance News editor

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.

Email Form Facebook Twitter LinkedIn RSS

Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Marshalls PLC 316.00 GBX 0.96 -

About Author

Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures