Marshalls, the concrete-products company, has recently made the difficult decision to cut approximately 250 jobs within the organization. This comes in response to challenging market conditions in the new house building and private housing repair, maintenance, and improvement sectors, which have resulted in a significant decline in volumes across all three divisions. In light of these circumstances, Marshalls has implemented measures to enhance its agility, reduce capacity, lower costs, and manage cash effectively.
Martyn Coffey, the Chief Executive of Marshalls, expressed regret over the job cuts but assured that the company has retained manufacturing capacity that can be swiftly utilized when market conditions improve. This is a strategic move to ensure a prompt response to any positive shifts in the industry.
Following suit, house builder Bellway also announced plans to reduce headcount as it aims to maintain its financial stability. It appears that many companies within the construction sector are facing similar challenges as they adjust to the current landscape.
In terms of financials, Marshalls reported a first-half pretax profit of £16.7 million ($21.2 million), down from £23.9 million in the previous year. This decrease can be attributed to £16.5 million in adjusted items and higher net financial expenses of £10.1 million compared to £3.4 million previously.
Despite the downturn, Marshalls generated revenue of £354.1 million for the period, a slight increase from £348.4 million. However, on a like-for-like basis, revenue contracted by 13%, highlighting the impact of the challenging business environment.
As a result of these developments, Marshalls has reduced its interim dividend from 5.7 pence to 2.6 pence to better manage its financial obligations.
Looking ahead, Marshalls anticipates that the tough market conditions will persist throughout the second half of this year and into 2024. Nevertheless, the company remains focused on implementing strategies that will position it favorably for the eventual market recovery.
Martyn Coffey remains confident in the long-term growth prospects of the industry, emphasizing the importance of executing key strategic initiatives to drive profitability when market conditions normalize.
At present, Marshalls’ shares are down 4.5%, trading at 246.4 pence.