Turnover for the six months to 30th June 2024 was 拢306.7m, down 13% from 拢354.1m in the same period last year. Adjusted profit before tax was 拢26.6m, 20% below last year鈥檚 first-half figure of 拢33.2m.
Group revenue reduction was driven mainly by a fall in sales of landscape products 鈥� a result of sustained low levels of new-build housing and private housing repair, maintenance and improvement (RMI) activity, the company said.
Chief executive Matt Pullen said that the impact of 鈥榳eak end markets鈥� was partially mitigated by 鈥榙ecisive management actions鈥� and the effects of Marshalls鈥� diversification strategy.
鈥淭he result in the first half is encouraging and demonstrates that the strategy of diversification, building on the group鈥檚 historic core landscape products business, through the acquisition and improvement of less cyclical businesses in recent years, has resulted in a more balanced group,鈥� said Pullen.
鈥淚n addition, we have maintained our focus on tightly controlling costs and working capital. We are, therefore, pleased to report annualised operating cashflow conversion at 111% and a year-on-year reduction in net debt of 拢28.8m, which remains a key capital allocation priority.鈥�
Pullen added that the company is currently undertaking a review of group strategy and has identified 鈥渁 number of opportunities to deliver outperformance over the medium term.
鈥淭hese include attractive sustainability-driven markets across bricks and masonry, water management and energy transition alongside a cyclical recovery in our core landscape and roofing businesses, supported by the new government鈥檚 commitment to increase house-building significantly.鈥�
Marshalls鈥� landscape products division derives around 45% of its revenues from commercial and infrastructure markets, 30% from new-build housing and 25% from private housing RMI.
鈥淩evenues generated from all end markets contracted during the first half of the year with demand being particularly weak in new build housing and private housing RMI,鈥� said Pullen. 鈥淚n addition, the reduction in volumes partially resulted from some loss in market share and steps are being taken to rebuild the group鈥檚 distribution points through mutually beneficial trading arrangements.鈥�
The company鈥檚 building products business derives about 60% of its revenue from new-build housing and about 30% from commercial and infrastructure. Revenue in this market fell by 6% year-on-year due to continued weakness in new-building housing although the company鈥檚 drainage products saw a modest increase in sales.
Marshalls is planning to hold a capital markets even in November where it will provide more information on its new five-year strategy.
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