Marshalls profits slump 46%

Landscaping products manufacturer Marshalls has reported pre-tax profits down 46% on sales that were 18% down at £311.7 m.
Marshalls’ pre-tax profit for the year to 31 December 2009 was £12.1m, down from £22.5m the year before.

Like-for-like daily sales fell 16.1%, with some stabilisation in the second half. Sales to the public sector and commercial end market, which represent around 58% of Marshalls’ sales, were down 17.5% for the full year and sales to the domestic market were down 12.9% compared to the previous year.

Various cost-cutting actions, including closing four manufacturing sites since June 2008 and the Landscape Installations operations, accounted for around £11.4m in savings.

The domestic strategy is to drive more sales through quality installers, with the objective of improving the product mix, continually developing the Marshalls brand and delivering a market leading level of service. The group says that after a period of significant uncertainty, ” the Domestic end market has stabilised with order books at 6.8 weeks in February 2010, compared with 5.6 weeks in February 2009.”

Graham Holden, chief executive, said: “There is still market uncertainty, not least because of the impending election. We have responded by building flexibility into the business, whilst retaining sufficient capacity for the medium term so that we can react quickly and effectively to changing market conditions.

In a difficult market we have achieved a resilient performance and are well positioned for an upturn. We are managing the business tightly and have significantly reduced our cost base. Cash generation has been strong. We are investing selectively in the business to develop new products and new markets and to build on the strong Marshalls brand.”