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Marshalls H1 Profit Rises 8% as Landscaping Offsets Flat Revenue

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Marshalls H1 Profit Rises 8% as Landscaping Offsets Flat Revenue

2026-08-10 11:01 UTCBy AlphaScala Research DeskSource reporting: finance.yahoo.comEditorial standards

Marshalls H1 Profit Rises 8% as Landscaping Offsets Flat Revenue

Marshalls posted H1 operating profit of £30.7m, up 8%, as Landscaping margins improved. The company kept full-year expectations unchanged despite weak housing demand.

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Marshalls (LON:MSLH) reported first-half operating profit of £30.7 million, up 8% from a year earlier, as flat revenue of £380 million was offset by margin gains in its Landscaping Products division.

Chief Financial Officer Justin Lockwood said profit before tax rose 13% to £24.9 million, helped by lower finance costs. Earnings per share increased 14% to £0.076. The company raised its interim dividend by 14%, consistent with its policy of maintaining two-times adjusted earnings cover.

Landscaping delivered the earnings improvement. Operating profit in the segment climbed £5.2 million on improved gross margins, lower manufacturing costs and reduced overheads. Lockwood said volumes fell 2% to 3%, with product mix weakening by about 1%. Pricing actions accounted for the rest of the flat revenue.

Marshalls remains on track to deliver £11 million in annualized cost savings by the end of 2026. The full amount is expected to materialise this year. The company also reported a 2.6-percentage-point increase in market share in Landscaping, reflecting recovery of previously lost share and gains across merchant and direct-to-site channels.

Building Products revenue slipped just under 1%. Growth in Mortars & Screeds was offset by declines in Water Management and Bricks & Masonry. Segment operating profit fell £700,000 to £6.2 million on lower volumes, oil-related surcharges and weaker manufacturing efficiency. Lockwood said an extended site shutdown hurt manufacturing in the period but is not expected to recur in the second half.

Water Management faced subdued new-housebuilding activity. Infrastructure-related revenue grew. The business generated roughly £80 million in revenue last year, with about two-thirds from new-build housing, Lockwood said. That mix has shifted six to seven percentage points toward commercial and infrastructure markets during the first half. Marshalls said Water Management holds framework agreements with three water utilities, structured as preferred-supplier arrangements rather than revenue commitments.

Roofing Products revenue declined slightly. Viridian Solar grew revenue about 7%, though the pace moderated as adoption of roof-integrated solar under 2021 building regulations became more established. Marley's revenue fell amid increased competition in concrete roof tiles and weaker new-build demand. Roofing operating profit declined £1.7 million to £23.1 million. Marley increased its overall concrete roof-tile market share by focusing on public and private RMI markets. It also gained share in clay roof tiles, partly aided by a competitor's extended kiln maintenance, though Lockwood said that position could normalise in the final quarter as competing capacity returns.

Lockwood said the company introduced oil-price-related surcharges in most businesses in May and in one unit in June. The first-half net direct cost impact from the Iran conflict was about £1 million. Marshalls has no current plans to increase surcharges further.

Net debt fell about £15 million year-on-year to £137 million. Leverage declined to 1.7 times EBITDA. Cash conversion was 98%, Lockwood said. The company kept a targeted approach to capital spending.

Management left full-year profitability expectations unchanged. They are not relying on a material second-half recovery. The company outlined a medium-term pathway to £112 million in operating profit, roughly double the 2025 figure. About £17 million is expected from self-help measures, £14 million from structural growth opportunities in solar, water management and infrastructure, and roughly £25 million from cyclical recovery and operating leverage as demand normalises. The cyclical recovery assumption is around 12% to 15%, not a return to 2022 volumes.

Gross capital expenditure in 2026 is expected near the bottom of the £20 million to £30 million annual range. Site disposals should generate £4 million to £5 million of cash, reducing net capex to roughly £15 million to £16 million.