Marshalls warns on profits, shares plunge

Marshalls warned on profits on Friday, sending its shares tumbling in early trading, after slowing demand dented revenues at the stone and concrete specialist.

Marshalls said group revenues rose by 4% on a like-for-like basis, or by 20% once the acquisition of pitched roof firm Marley was included, to £544m in the nine months to 30 September.

Its building products division saw revenues rise 22% to £149m, with a particularly strong performance from the bricks and masonry business.

But the landscape products unit - which has the most exposure to private housing repair, maintenance and improvement (RMI) - continued to face "tough" trading conditions, Marshalls said, with revenues down 6% at £311m.

The firm continued: "The rate of contraction increased in the third quarter, to 16% compared to 1% at the half year, due to a marked softening of demand for private housing RMI in both the UK and international markets, and de-stocking in the distribution channel."

The group said it had reducing manufacturing output, which is expected to cut operating costs by around £10m annual from 2023, and was increasing prices in response to cost inflation.

But it also acknowledged it would not be enough to completely offset the fall in demand, and as a result the board now expects full-year profits to come in "slightly below the bottom end of the current range of market expectations". Analysts had pencilled in full-year profits of between £95.1m and £101m.

The shares fell sharply and by 0815 BST they were down 25% at 227p.