Marshalls cuts divi as profits fall, but outlook improves

(Sharecast News) - Landscaping, building, and roofing products group Marshalls has trimmed its dividend after a dip in profits in 2024, but pointed to a recovery in end-markets later this year. The company said its confidence is supported by the government's ambition to "reinvigorate" new house building and invest in infrastructure, bolstered by further reductions in interest rates.

Marshalls reported revenues of £619.2m, down 8% on 2023, with the smaller landscaping division seeing a 17% drop in sales due to lower volumes, price pressures in the industry and a disposal in Belgium.

Revenues in building and roofing, which together account for 80% of group sales, fell 3% and increased 4%, respectively.

The company said a focus on efficiency gains and cost reduction helped limit the decline in adjusted pre-tax profit to 2% to £52.2m.

"I am pleased to report our results for what has been an important year for Marshalls, where the group has shown resilience in challenging markets by restricting the reduction in profit before tax to two per cent despite an eight per cent contraction in revenue," said chief executive Matt Pullen.

Nevertheless, in line with the group policy of covering dividend twice by adjusted earnings, the company reduced its final dividend by 5% to 5.4p per share, taking the full-year payout to 8.0p, down 4% on the year before.

Looking ahead, Marshalls expects landscaping to return to growth in 2025, along with roofing and building.

"The group is well positioned to respond swiftly to improving activity levels as key end markets recover and the board remains confident about delivering a material increase in profitability and returns over the medium-term," Marshalls said.