Marshalls shares fall as domestic demand weakens

Shares in landscaping products supplier Marshalls fell on Wednesday as labour shortages offset strong consumer demand in its domestic division.

Group revenue for the four months to April 30 rose 7% to £201m against the same period last year, supported by the price increases at the start of this year.

Sales in public sector and commercial end market were up 14% to £137m and accounted for 68% of group revenue, with a strong new build housing market underpinning demand, Marshalls said on Wednesday.

However, domestic end-market sales fell 8% to £52m due to a lower installer capacity in March and April, as workers took more holidays compared to 2021 when the country was in lockdown. Shares in the company fell 9% on the news.

“The comparative picture is expected to progressively normalise during the remainder of the year,” Marshalls said.

Looking ahead, the demand outlook has weakened, with the Construction Products Association lowering its growth forecast for the UK to 2.8% in 2022 and 2.2% next year from previous guidance of 4.3% and 2.5%, reflecting a more uncertain trading environment.

"The group continues to operate in an inflationary environment and it remains confident that input cost increases can be passed on through the supply chain,” Marshalls said.