Brexit fears push down Marshalls' commercial sales

Short term uncertainty in the economy has delayed some building projects, leading to a "slight softening" in commercial sales at paving slab supplier Marshalls over the last two months.

Marshalls posts lower than expected sales. Image: Marshalls
Marshalls posts lower than expected sales. Image: Marshalls

UK revenue for the four months ended 30 April 2016 was up one per cent at £120 million, compared to £119m in 2015.

In a statement to investors, Marshalls said it had maintained its market share during this period, although some customer projects have been delayed. This is in line with recent data from the Construction Products Association, which blames uncertainty around Brexit for a slowdown in orders.

Marshalls' share price fell by 11 per cent following the announcement but has climbed back 5 per cent.

The company said the underlying indicators within the business remain strong and the board is confident of achieving its expectations for 2016.

Sales in the public sector and commercial end market, which represented approximately 64 per cent of Marshalls' total sales, were in line with the same period last year. The group continues to target those parts of the market where higher levels of growth are anticipated, such as rail, new build housing, water management and street furniture.

Sales in the domestic end market, which represented approximately 31 per cent of Marshalls' total sales, were up four per cent compared with last year.

A survey of domestic installers at the end of April 2016 revealed order books of 12.4 weeks compared to 10.6 weeks in 2015, and compared with 10.5 weeks at the end of February 2016. At 12.4 weeks, this is the highest order book to be reported at this time of year.

The company said the pipeline for major UK infrastructure projects remains strong and the construction schedule has extended.

Wet ground conditions early this year had slowed progress on many domestic and commercial sites. The company also expects "subdued" local government landscape spend to eventually return to normal levels.

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