Building, roofing and landscaping-products company Marshalls has posted a 4 per cent rise in half-year (H1) revenue to £319.5m but a 46 per cent drop in pre-tax profit to £11.7m.
The group’s landscaping division served as the main drag on the numbers in the six months to the end of June, with adjusted operating profit plunging 96 per cent to £300,000.
Marshalls pointed to weakened demand in the sector but said its “transform and grow” plan was starting to show promise.
Chief executive Matt Pullen told Construction News the “improving trend in revenue for landscaping and recovery of market share” was encouraging, and that much work was being put into resetting the front end of the business, with an emphasis on building stronger customer relationships.
“We’ve seen our brand presence grow across the distributor network, and you can see that on the ground,” he said. “And even while the profitability was below expectations in landscaping, that business is starting to see some early improvement signs.”
He added: “We’ve taken some decisive action to reduce costs [and] align our capacity to meet the current market demand, and we’re making some really strong progress with our portfolio simplification.
“That portfolio has become overly complex and overly large, and we’re now resetting [it].”
H1 operating profit at the West Yorkshire-based company was 37 per cent lower, at £18.1m, and the return on capital employed fell from 7.6 per cent to 7.3 per cent.
On an adjusted basis, pre-tax profit fell from £26.6m to £22m.
While landscaping failed to deliver, other divisions fared better. In roofing, which generates around half its turnover from new housing, revenue at Marley – which Marshalls acquired three years ago – grew modestly. But the outstanding performer was Viridian Solar, which saw revenue rise by 50 per cent in H1.
Pullen told CN “part of that is driven by regulatory tailwinds, and particularly in a business like Viridian Solar, by the Part L building regulations”, the latest updates for which came into force in June 2022, setting standards for energy efficiency on new and existing buildings.
“That business was performing really, really well, and will perform even better as [the government] move[s] forward with the announcement of the Future Homes Standard,” which will mandate the use of solar power in most new homes. “And we expect that to come in at some point in 2027,” he said.
Marshalls’ operating cashflow conversion on an annualised basis at June 2025 was 94 per cent of adjusted EBITDA, down from 111 per cent in June the previous year.
Even so, the company said the numbers demonstrate the “consistently strong cash-generative nature of the group’s businesses”.
The dividend on the company shares fell by 15 per cent to 2.2p a share, which remains within the scope of the board’s dividend policy.
Marshalls’ shares fell sharply at the end of July, after the firm lowered its full-year adjusted profit before tax forecast to £42m-£46m. The share price dipped by about 0.5 per cent in mid-morning trading in London today (11 August), having lost around 30 per cent in value already this year.
Looking forward, Pullen told CN he was confident of solid performances across the company, even in subdued markets.
“Our water-management business, which was formerly civils and drainage, has grown really strongly in the first half of the year, and we expect similar growth in the second half of the year.
“Across our business, there are some really good stories of growth, in line with our ‘transform and grow’ strategy, and landscaping is about turning around that performance – controlling the things that we can control in the near term, while setting it up to take advantage as and when market conditions do improve.”
Analysts at Peel Hunt said: “It was a tough first half for the group, as the landscape division held back decent performances in the other divisions.”