(Sharecast News) – Building products manufacturer Marshalls warned on profits on Monday and said it will cut around 250 jobs, as it announced the closure of one of its factories, pointing to high inflation, rising interest rates and weaker consumer confidence.
In an update for the six months to the end of June, Marshalls said it expects to report revenue of £354m, up 2% on the same period a year earlier. On a like-for-like basis, however, group revenue fell 13%.
Meanwhile, adjusted pre-tax profit is expected to be around £33m, down from £45m.
“This result has been delivered against the backdrop of challenging market conditions with persistent weakness in new build housing and private housing RMI, which are key end markets for the group,” it said.
“The sustained high levels of inflation, increasing interest rates and weak consumer confidence means that the board anticipates the group’s performance in the second half will be below its previous expectations.”
Marshalls also announced the closure if its factory in Carluke, a reduction in shifts and capacity in other facilities, and a restructuring of its commercial team.
“Regrettably, these changes are expected to result in a reduction of approximately 250 roles in addition to around 150 roles that were removed in the second half of 2022,” it said.
“These actions are expected to deliver annualised savings of approximately £9m, with around 40% of this benefit being realised in 2023. The board has reduced its capital expenditure plans without impacting critical projects, is executing a programme of surplus land disposals, and has continued to focus on efficient working capital management in order to reduce the group’s net debt.”