Marshalls: Revenue ticks down but recovery on the horizon
Housing industry supplier Marshalls has reported another dip in revenue but has predicted a cyclical recovery in its key markets.
The group, which is headquartered in West Yorkshire, said that revenue fell by three per cent year on year in the third quarter, a “material improvement”, from earlier in the year.
Year-to-date revenue stood at £476m, down nine per cent from £528m at the end of the third quarter last year, the company said.
Marshalls produces three types of products: building, roofing and landscape. Revenue in its landscape business, which has been struggling this year, fell by 13 per cent in the quarter and 17 per cent in the year to date.
The company reported double-digit growth in roofing products, flat growth in building products, and a 70 per cent rise in revenue for solar products driven by demand for energy-efficient building solutions.
Marshalls said it expected full-year profit to be in line with previous expectations.
The construction industry has struggled over the past few years. The rising cost of borrowing has impacted profit margins on many ongoing and upcoming development projects, which has had knock-on effects on Marshall’s markets.
England’s house building pipeline is at the lowest level since records began 17 years ago, with multiple housebuilders reporting fewer completions year-on-year – although they say the outlook is improving.
Marshalls said it expected a “cyclical recovery” in landscape and roofing, “supported by the impact of the Government’s commitment to increase housebuilding significantly”.
Earlier this year, the company said it was “cautiously optimistic” about the future.
Analysts at Panmure Liberum said that Marshalls “should see further improvements in revenues… [but] this trend is likely to be a slow burn.”
“Over the coming two to four years, we expect increased activity to drive margin expansion and a restoration in double digit returns”, analysts added. They rated the stock a ‘buy’.