(Alliance News) - Marshalls PLC on Tuesday posted a sharp swing to loss for the first half of 2020, caused by crashing revenues and restructuring costs.
Shares in the FTSE 250-listed landscape products manufacturer were trading 3.3% lower at 650.50 pence each on Tuesday morning in London.
For the six months ended June 30, Marshalls posted a pretax loss of GBP16.0 million, swinging from a profit of GBP39.0 million a year prior. This was as revenue fell 25% to year-on-year to GBP210.0 million, and GBP17.6 million of restructuring costs and asset impairments were recognised.
Earlier in May, the West Yorkshire-based company said that to mitigate the effects of the pandemic, it had taken further steps to restructure its operations, putting forward proposals which include selective site closures, changes in shift patterns, and also to the size and structure of support functions. It noted that 400 positions - which represents 15% of its workforce - could be at risk from these changes. As part of the restructuring, it also permanently shut three manufacturing facilities and a number of Premier Mortars locations.
Marshalls' said that while its restructuring programme cost it GBP17.6 million, the actions are expected to reduce annual fixed costs by around GBP12 million.
"Although business confidence and market demand remain uncertain, recent trading has been better than expected and continues to improve. Our restructuring programme is now complete and the new bank facilities have further strengthened the group. The decisive actions that have been taken have improved the efficiency and flexibility of our plants and will help Marshalls to emerge from the current market difficulties in a stronger competitive position," said Chief Executive Martyn Coffey.
No interim dividend was proposed due to Covid-19, the company said, adding that the resumption of future dividends will be reviewed in the full year. For comparison, a 4.70p dividend was paid for the first half of 2019.
Net debt at June end was GBP53.9 million, down from GBP55.6 million year-on-year.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Marshalls (MSLH)