Marshalls: Can struggling landscaping giant exceed ‘fairly low’ expectations?
Investors will turn their focus to building products supplier Marshalls interim results on 16 August to see if the business has picked up any momentum amid a growing slump in the UK house building market.
The group, which is headquartered in West Yorkshire, has shown signs of struggling in recent months and announced in July that it would cut a further 250 job roles in a scramble to save £9m a year.
It comes after the group axed 150 job roles last year as high inflation and poor consumer confidence has led to weak trading in the residential sector. Marshalls also said it would close a factory in Carluke, Lanarkshire in Scotland.
This summer , the business also warned that pre-tax profit in the first half would be around £33m, down from £45m when compared to the same period last year.
The bleak outlook has hindered Marshalls share price with the business trading no higher than they did in 2015 and analysts have already pencilled in a near-40 per cent drop in pre-tax profit for 2023.
Russ Mould, investment director at AJ Bell, told City A.M market expectations are already “fairly low”.
“Analysts will look for any guidance on like-for-like sales momentum in the second half, and also how plans to cut capacity, capital investment and thus jobs and costs are going. Attention will also switch to the balance sheet,” he said.
“Net debt is well within covenants and the cost cuts and strategic disposals of land assets should help here and protect the downside during a difficult period for the business.”
Marshalls is one of many residential businesses to be hit hard by a season of soaring rates and ailing demand.
It also reported a fall off in the number of homes it built in the year ended 31 July, contracting to 10,945 homes compared to 11,198 in the same period last year.