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Marshalls sales down 6%

Published: 14 January 2009
Landscaping products firm plans further closures as part of cost saving initiative.
Marshalls sales down 6%
Marshalls' Group results showed revenue for the year ended December 31, 2008 was down 6% at £378m compared with £403m in 2007.

Sales to the public sector, which represent 59% of Marshalls' sales, saw a slight increase of 1% on 2007, while sales to the domestic market were down 15%.

The Huddersfield-based company is now focusing on 'cost reduction' and cash conservation in a bid to maintain 'the capability of he business for the medium term'.

Consultation has already begun on proposals to close two of its concrete manufacturing operations and is expected to reduce the display centre side of its service.

Marshalls closed another two of its concrete manufacturing operations in July last year. The shutdown of its centre at Cannock in the West Midlands and Sawley in the East Midlands is reported to have released £5m of cash from stock.

The company blames 'the weakening demand outlook' and said that it has already made capacity reductions in a number of its other operations.

The works closure cost in 2008 is anticipated to be around £12m. Once these changes are complete, the remaining network of manufacturing sites is expected to provide the capability to meet expected medium term demand.

In a statement the company said: "The overall demand outlook remains uncertain. Based on contract awarded data, the outlook for 2009 in the public sector remains positive but demand has weakened in the commercial and industrial sectors with projects being delayed or cancelled as economic conditions have deteriorated.

We are focusing sales effort on the more robust sectors of market activity. The strength of our brand, our efficient manufacturing and sourcing, our comprehensive distribution network and our decisive actions to focus on cost reductions and cash management will maximise our short term performance in an uncertain market without prejudicing our longer term prospects, which we consider to be good."

Marshalls maintained an interim dividend of 4.55 pence per share, which was paid on December 3, 2008. The board will make a decision on the level of the final year dividend for 2008 in March this year.

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