Building products supplier Marshalls is on track to to meet its profit expectations this year, but says the ‘subdued’ building market is unlikely to improve.
Marshalls said its pre-tax profits were in line with expectations in 2025 following 2 per cent growth in group revenue to £632million, down from 4 per cent growth in the first half of the year.
Its building and roofing products both saw sales increase by 4 per cent, although there was a pullback in roofing in the second half because of ‘lower market activity levels.’
Sales fell 1 per cent for its landscaping products, which includes paving and kerbs, in a ‘subdued market’.
Its landscaping revenues have struggled following a 96 per cent collapse in its operating profits for the division.
Marshalls said it had been affected by ‘prolonged pre-Budget uncertainty during the second half’ but £3million of cost-cutting measures had helped it push through the year.
Uncertain market: Marshalls said the market had been subdued in 2025 ahead of the Budget
It expects 2026 to be equally as uncertain.
Marshalls said: ‘While the group is not anticipating a significant improvement in market activity levels during the next 12 months, the actions taken to reduce the cost base during 2025 give the board confidence that the group will deliver an improved financial performance in 2026.’
Leading housebuilders last week said that there had been a slowdown in sales in the lead up to the Budget, and warned that Labour’s 1.5million homes target was unlikely to be met.
Marshalls’ net debt, excluding IFRS16 lease liabilities, stood at £138million at year-end.
Chief executive Simon Bourne, who was today appointed on a permanent basis, said: ‘Marshalls delivered a resilient performance, evidenced by a return to revenue growth despite the challenging market backdrop, and delivering profits in-line with the market’s expectations.
‘I am confident that the group is well positioned to benefit from a market recovery and structural growth drivers over the medium term.’
Shares in Marshalls slipped 1.24 per cent on Monday, after shedding more than a third of its value over the past year.
Mark Crouch, market analyst at eToro said: ‘The bigger concern for investors though, is that profits continue to weaken despite rising revenues, a concerning sign that margins remain under pressure.
‘Demand will always ebb and flow, but cost discipline is now critical.
‘With Marshalls’ Transform & Grow strategy already under strain, any resurgence in inflation could leave the group dangerously exposed to further profit erosion, and renewed investor nerves.’
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