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Marshalls takes its medicine as restructuring costs bite

8 Mar 13 Marshalls, leading producer of block paving and other landscaping products, dived into the red last year as it spent £21.5m on restructuring to reduce production capacity and cut costs.

A lovely Marshalls driveway
A lovely Marshalls driveway

For the year to 31 December 2012, revenue was down 7% on continuing operations to £309.7m (2011: £334.1m). The fall in sales was attributed to the record rainfall.

Pre-tax profit before restructuring costs and asset impairments was down 24% to £10.4m (2011: £13.7m).

Factor in the £21.5m charge and Marshalls saw a pre-tax loss of £11.2m.

Inventory reduction and property asset sales helped to bring net debt down by 18% to £63.5m.

Rain particularly affected the UK domestic end market, which represents nearly a third of group sales.  Domestic sales were down 6%. Sales in the public sector and commercial end market, accounting for nearly two-thirds of total sales, were down 6%.  The international business is being developed and accounts for close to 5% of group sales. In 2011 Marshalls bought two operational sites and manufacturing assets in Belgium, via a newly-formed subsidiary.

Chief executive Graham Holden said: "Marshalls acted swiftly and decisively to reduce both production output and the cost base whilst retaining substantial operating and financial flexibility.”

He added: “The general economic background remains unpredictable and economic forecasts for 2013 are flat.  Commercial demand, particularly from rail infrastructure and home development, is improving; the installer market is showing good order books; and the group's international business is delivering strong year on year sales growth.”

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MPU
MPU

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