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Rain drives Marshalls into £18.5m restructuring

31 Aug 12 Paving block producer Marshalls has continued to be hit by the record wet weather, with £10m wiped off its sales in the second quarter - equivalent to six days' installation.

Marshalls' revenue for the six months ended 30 June 2012 was £167.5m (2011 H1: £177.2m), a decrease of 5%.

The weather had a bigger impact on the domestic end user market, which represents 34% of group sales. These were down 14% year on year. Public sector and commercial sales were only down 2%.

Including an £18.5m first-half charge for operational restructuring costs and asset impairments, the company reported a pre-tax loss of £10.8m for the six months to 30 June 2012, compared to a £12.2m profit for H1 2011.

Excluding restructuring costs and asset impairments, pre-tax profit for the half year was down 38% to £7.6m (2011 H1: £12.2m).

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Cost reduction measures include works closures, capacity reductions and temporarily mothballing plant.

Chief executive Graham Holden said: "The operational restructuring initiatives the Group has taken are in direct response to the weaker market outlook.  The actions taken set underlying capacity and the cost structure at a sustainable level for the lower volumes forecast and enable Marshalls to create its own operating certainty.

“Despite the weakness in the economy Marshalls continues to strengthen its market position and there has been an improvement in underlying trading margins.  The Group's growth initiatives are progressing well and sales effort is being reallocated to move these forward more quickly. Marshalls has strong operational flexibility.  The cost reduction initiatives, targeted growth plans, strength of the installer order book, resilience of the Commercial end market and the opportunities created by the Group's International growth strategy should continue to mean that Marshalls is well placed to outperform the market and achieve good growth when market conditions improve."

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