MARKET REPORT: Shares in Marshalls plunge to six-year low

Shares in the paving and landscaping firm Marshalls plunged to a six-year low as household spending on improvements was hit by the cost of living squeeze. 

They fell 16.6 per cent, or 50.2p, to 251.8p after it said ‘softening’ demand in the UK and internationally caused revenues in its landscape products business to slide 16 per cent in the third quarter. 

To offset the decline and save money, it has cut back on manufacturing to control its stock levels, although this hit the efficiency of its factories. 

Squeeze: Marshalls said it had been trying to battle the effects of inflation through price increases, but this had not been enough to offset the accelerating decline in revenues

And it said it had been trying to battle the effects of inflation through price increases, but this had not been enough to offset the accelerating decline in revenues. 

It expects results for the year to be ‘slightly below the bottom end’ of current market expectations, sparking the share price slide. 

Analysts had predicted a profit of between £95m and £101m for the year. ‘In recent years there has been a trend for households to dig up the front garden and replace the weeds with paving stones, so they can park their car and not worry about traffic wardens. As a paving stone specialist, Marshalls enjoyed booming sales,’ said AJ Bell director Russ Mould. 

But that sales momentum had now disappeared as homeowners cut back spending on repairs and improvements. ‘For anyone watching their pennies, it’s an easy decision not to splash thousands of pounds to get the front drive spruced up,’ Mould said. 

The FTSE 100 dipped 0.09 per cent, or 6.18 points, to 6991.09 while the FTSE 250 was down 1.58 per cent, or 279.36 points, to 17,353.28. 

Sentiment was rattled after the Bank of England’s deputy governor Sir Dave Ramsden said it was likely to keep raising interest rates to curb inflation. 

But better-than-expected US jobs figures showed the world’s largest economy remained relatively solid, a good sign for investors seeking a haven for cash amid growing volatility worldwide. 

Another beneficiary of this flight to safety was gold, which was set for its biggest weekly gain since March after rising to just over $1700 an ounce from around $1660 at the end of last week. However, the better jobs data means the US Federal Reserve is likely to continue hiking interest rates. 

One of the top FTSE 100 risers was defence group BAE Systems, which gained 3.4 per cent, or 27.6p, to 846.2p after analysts at JP Morgan hiked their target price on the stock to 1000p from 965p. 

Oil stocks were also on the rise as Brent crude continued to climb following OPEC’s decision to sharply cut production. 

Shell shares were up 1.5 per cent, or 33.5p, at 2345.5p and BP gained 1.9 per cent, or 8.75p, to 469.1p. Bus and train operator First Group added 0.4 per cent, or 0.4p, to 108.9p after it received a short-term extension from the Department for Transport to continue running the West Coast Partnership, which includes the Avanti West Coast railway. 

The contract, which had been due to expire a week on Sunday, will now run until the end of March for Avanti to provide an ‘urgent increase in services’. 

Meanwhile, Sondrel, a computer chip designer based in Berkshire, unveiled plans to list on AIM later this month and raise £20m to fund its expansion plans. It has priced its shares at 55p each, giving it a market cap of just over £48m. 

Also planning a listing was ACG Acquisition Co, which was aiming to float on the LSE’s main market while raising £112m. 

ACG is a special purpose acquisition company, a type of shell corporation that lists on the stock market intending to buy a private company, allowing the firm to go public without going through the traditional listing process.

This post first appeared on Dailymail.co.uk