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Recovering market boosts Marshalls

30 Aug 13 A restructuring at paving block producer Marshalls appears to be paying dividends with profits on the rise.

Marshalls paving blocks
Marshalls paving blocks

The company said that, although the first quarter was slow, demand was now improving and order intake was increasing.

For the six months to 30 June 2013, operating profit was up 11% to £9.8m and pre-tax profit was up 15% to £8.0m. This was despite a 4% decline in revenue, attributed to the restructuring, to £156.5m.

Net debt was reduced by 37% to £53.0m from £83.8m a year ago.

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While public sector demand has remained subdued, commercial order intake has been strong in the second quarter with Marshalls securing its largest ever natural stone paving order in Manchester and two significant export orders for street furniture in Saudi Arabia and Qatar. Stone cladding, a relatively new market for the company, is a growth area and the supply of stone for a new office building in the City of London will deliver sales in the region of £6m over the next two years. Commercial work from rail and new house building is also increasing, albeit from historically low levels.

Chief executive Graham Holden said: "Economic conditions are improving and the forward indicators are more positive.  After a weak first quarter our markets are now growing and we remain on plan.  We had anticipated improving market conditions as the year progressed and, therefore, there is no change to our expectations for the current year.

“In the short term the priority is to increase output to meet growing demand and the combination of higher sales and greater output should deliver benefits from operational gearing.  Looking further forward the action taken to reduce the cost base and reduce net debt, combined with a range of growth initiatives and our operating flexibility, means the business is well positioned to take full advantage of the improving market conditions."

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