class="post-thumbnail open-lightbox" href>
Marshalls PLC (LSE:MSLH) has warned that full-year profit will be slightly below market forecasts following a drop in demand for landscaping products from struggling households hit by soaring energy prices and inflation.
The paving specialist said its Landscape Products division saw revenue fall 6% to £311mln in the nine-month period to 30 September 2022, with the rate of contraction rising to 16% for the third quarter alone, due to a “marked softening” of demand for private housing market repair, maintenance and improvement (RMI) in both the UK and international markets and destocking in the distribution channel.
In a trading statement, Marshalls said it “now anticipates that the outturn for the group as a whole will be slightly below the bottom end of the current range of market expectations” of profits of £95.1mln-£101.0mln.
The group said it has responded to the tough trading conditions by reducing its manufacturing output to manage inventory levels, which has led to a short-term impact on efficiency at its factories. It expects these measures to reduce operating costs by around £10mln a year from the start of 2023.
It is mitigating cost inflation through price increases.
Group revenue for the first nine months rose by 20% to £544mln, with like-for-like growth of 4%.
At the Marshalls Building Products business, revenue increased by 22% £149mln in the period, boosted by a “particularly strong performance” from the Bricks & Masonry operations.
The group said its balance sheet “continues to be robust”, with net debt to proforma EBITDA expected to be approximately 1.5 times at the year end, adding that it maintains “good headroom against our bank facility and its covenants, which will support investment priorities going-forward”.
Comments are closed.