Marshalls toughs out the wettest ever second quarter

The wettest second quarter on record together with the sliding economy have hit revenues and profit at landscape products group Marshalls.

Interim results for the half year to the end of June revealed profit before tax down from just over £12 million last year to £7.6 million.

Revenue meanwhile tumbled almost £10 million to over £167 million this year with net debt rising from just over £70 million to nearly £84 million this June.

Chief executive Graham Holden said: "Despite the weakness in the economy Marshalls continues to strengthen its market position and there has been an improvement in underlying trading margins. Marshalls has strong operational flexibility."

The business said it had taken "decisive action" to reduce production output and its cost base. Meanwhile capacity reductions were expected to reduce inventory volumes by around £10m over an 18-month period.

Top priorities included maintaining national geographic coverage and good customer service, to continue to invest in initiatives that delivered sales growth and improved market positions, and to further develop new markets and new overseas market areas, he said.

"The cost reduction initiatives, targeted growth plans, strength of the installer order book, resilience of the commercial end market and the opportunities created by our international growth strategy should continue to mean that Marshalls is well placed to outperform the market and achieve good growth when market conditions improve."

Marshalls cited figures last month from the Construction Products Association, which forecasted a decline in construction activity of 4.5 per cent in 2012 and a decline of 1.3 per cent in 2013.

"Within this overall decline, market demand for heavyside products is forecast to be lower by a greater amount than previously expected," said Marshalls.

"This reflects a weakening in outlook as a slow recovery in private-sector demand fails to offset the contraction in demand from the public sector."

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