Marshalls slashed around 250 jobs in the first half as the building materials supplier’s profits were rocked by a slowdown in the property market.
The paving stone specialist’s adjusted profit before tax was down by 26 per cent to £33.2million year-to-year for the six months to 30 June.
CEO Martyn Coffey said the job cuts were necessary after ‘challenging’ market conditions ‘led to a material reduction in volumes across all three of our reporting segments’.
CEO Martyn Coffey said the job cuts were necessary after ‘challenging’ market conditions ‘led to a material reduction in volumes across all three of our reporting segments’
Marshalls shares were down by 1.16 per cent to 255p in morning trading on Wednesday.
Rivals Travis Perkins and SIG have also been hit by the building slowdown, which has been driven by rising interest rates and their impact on mortgage rates.
Earlier this month, Travis Perkins said that it expects adjusted operating profits, which shrunk by 31 per cent in the first half, of about £240million for the full year, compared to £295million in 2022.
SIG also warned that profits are set to come in at the lower end of forecasts, amid ailing demand across Europe and a spike in operating costs.
Housebuilder Taylor Wimpey also warned this month that higher mortgage rates are weighing on potential customers’ ability to afford to buy new homes.
Marshalls, which benefited from homeowners upgrading their gardens and driveways during the pandemic, said it had seen a ‘marked’ softening in demand during some months in 2022.
Coffey added: ‘This resulted in a significant decline in Group profitability compared to the first half of 2022. We have responded by taking action to improve our agility, reduce capacity, take cost out of the business, and manage cash.
‘Regrettably, these actions necessitated in a reduction of approximately 250 roles across the organisation. However, we have been careful to ensure that we have sufficient latent manufacturing capacity that will allow us to respond quickly when there is an improvement in market conditions.’
The group’s interim results continued a trend in its decline in profitability.
In October, Marshalls issued a profit warning as the cost of living crisis forced households to cut back on landscape projects.
