Building products group Marshalls has posted a 77 per cent increase in pre-tax profit in its latest full-year results, despite a fall in turnover.
The Yorkshire-based firm today revealed profit before tax of £39.4m for the 12 months to 31 December 2024, up from £22.2m in the prior year.
However, the increase was largely due to costs incurred in resetting the business in 2023. When removing one-off outlays from both years, the firm made an adjusted pre-tax profit of £52.2m in 2024, down 2 per cent year on year.
The London Stock Exchange-listed Marshalls spent £11.3m on a major restructuring exercise in 2023, as it “took steps to reduce manufacturing capacity and the cost base in response to a reduction in market demand”.
This process was also cited as the reason for a further £7m charge the same year for impairment of property, plant and equipment.
Marshalls’ revenue dropped 8 per cent to £619.2m in 2024, with the total being £671.2m the previous year.
But chief executive Matt Pullen said in this morning’s results announcement that he was “proud” of the group’s “resilient financial performance in challenging market conditions”.
He added: “The reduction in revenue was partly mitigated by decisive actions taken in 2023 to reduce capacity and costs by around £11m, improve manufacturing efficiency and lower net finance expenses.
“Pleasingly, we also reduced net debt through active working capital management, optimising capital expenditure plans and selling surplus assets.”
Pullen said he was “excited” about “growth prospects” and noted that the firm’s Transform & Grow strategy had identified “several opportunities for market outperformance over the medium-term”.
Marshalls said its Landscaping Products division had suffered revenue contraction of 17 per cent in 2024, resulting from a combination of lower volumes, pricing pressure and the disposal of the group’s Belgian subsidiary.
A “comprehensive improvement plan” was launched last summer, aiming to strengthen leadership of the unit, develop “excellence capabilities”, simplify the portfolio, boost operational efficiency and build long-term partnerships with customers and suppliers.
“We are confident that this plan will deliver a return to revenue growth during 2025 and a progressive and significant improvement in profitability from 2026,” said Pullen.
He added that the board expected a market recovery later this year, saying: “This confidence is underpinned by the government’s ambition to reinvigorate new house building and to invest in developing the nation’s infrastructure alongside further likely cuts to interest rates.
“The group is well-placed to leverage this recovery through its diverse portfolio of businesses, as evidenced by the encouraging performances in roofing and building products, which currently deliver 80 per cent of profits, and the benefit of operational leverage.
“The board remains confident about delivering a material increase in profitability and returns over the medium-term.”
Official figures for January, released earlier this month, showed that new housing starts drove a year-on-year recovery in building material deliveries, although levels remain subdued compared with recent years.
Department for Business and Trade data showed that brick deliveries increased by 8.5 per cent in January compared with the same month in 2024, while deliveries of concrete blocks rose by 4.2 per cent on the same basis.
