Marshalls (LON:MSLH) reported broadly flat first-half revenue of £380 million as weak activity in new housing and private housing repair, maintenance and improvement markets continued to weigh on volumes. However, operating profit rose 8% to £30.7 million, supported by improved profitability in its Landscaping Products segment.
Chief Financial Officer Justin Lockwood said profit before tax increased 13% to £24.9 million, helped by lower finance costs, while earnings per share rose 14% to £0.076. The company increased its interim dividend by 14%, in line with its policy of maintaining two-times adjusted earnings cover.
Landscaping improvement plan lifts profit
Landscaping Products revenue was steady despite lower volumes, as pricing actions offset weaker demand. Lockwood said volumes declined between 2% and 3%, with product mix weakening by about 1%, while pricing accounted for the balance of the segment’s flat revenue performance.
Operating profit in Landscaping increased by £5.2 million, driven by improved gross margins, lower manufacturing costs and reduced overheads under the division’s improvement plan. The company said it remains on track to deliver £11 million of annualized cost savings by the end of 2026, with the full amount expected to be delivered this year.
Management said customer engagement and service performance improved, with Landscaping net promoter scores up 11 percentage points since 2025. The business reported a 2.6-percentage-point increase in market share, reflecting a recovery of previously lost share and additional gains across merchant and direct-to-site channels.
The company also highlighted operational measures including a 19% reduction in intra-site journeys and a 30% reduction in stock-keeping units since 2025. Project quotation activity increased 15%, supported by digital design and engineering tools introduced in June and new product launches.
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, he said, adding that Marshalls had no current plans to increase surcharges further.
Roofing and Building Products face market pressure
Building Products revenue declined by just under 1%, with growth in Mortars & Screeds offset by lower revenue in Water Management and Bricks & Masonry. Segment operating profit fell £700,000 to £6.2 million due to lower volumes, oil-related surcharges and weaker manufacturing efficiency.
Lockwood said an extended site shutdown affected manufacturing performance during the period but is not expected to recur in the second half. Commercial actions and overhead discipline partly offset those pressures.
Water Management was affected by subdued new-housebuilding activity, although infrastructure-related revenue grew. The business generated around £80 million in revenue last year, of which about two-thirds came from new-build housing, Lockwood said. That mix has shifted by approximately six to seven percentage points toward commercial and infrastructure markets during the first half.
Marshalls said Water Management has framework agreements with three water utilities. Management described the agreements as preferred-supplier arrangements that provide access to design activity and investment plans, rather than commitments to specific revenue.
Roofing Products revenue also declined slightly. Viridian Solar grew revenue by about 7%, although the pace moderated as adoption of roof-integrated solar under 2021 building regulations became more established. Marley’s revenue was lower amid increased competition in concrete roof tiles and weaker new-build housing demand.
Roofing operating profit declined £1.7 million to £23.1 million. Higher Viridian Solar volumes and commercial discipline supported profit in that business, while Marley was affected by lower concrete tile volumes and weaker manufacturing efficiency.
Management said Marley increased its overall concrete roof-tile market share by focusing on more resilient public and private RMI markets. It also reported stronger share in clay roof tiles, partly aided by a competitor’s extended kiln maintenance, though Lockwood said that market position could normalize in the final quarter as competing capacity returns.
Medium-term profit pathway and outlook
Marshalls said its strategy remains focused on execution rather than a redesign of its operating model. The company outlined a medium-term pathway to £112 million in operating profit, which would be roughly double the operating profit achieved in 2025.
- About £17 million is expected from self-help measures, including cost control, margin expansion, product mix and market-share gains.
- Approximately £14 million is expected from structural growth opportunities in areas such as solar, water management and infrastructure.
- About £25 million would come from cyclical recovery and operating leverage as demand normalizes.
Lockwood said the self-help initiatives are expected to be delivered over the next two to three years. The cyclical recovery assumption underpinning the framework is around 12% to 15%, rather than a return to 2022 market volumes.
The company expects gross capital expenditure in 2026 to be near the bottom of its £20 million to £30 million annual range. Site disposals are expected to generate £4 million to £5 million of cash, reducing net capital expenditure to roughly £15 million to £16 million.
Management said end markets remain subdued and that it is not relying on a material second-half recovery to meet its targets. Marshalls left its full-year profitability expectations unchanged, citing the progress of its Landscaping savings program, commercial discipline and diversified portfolio.
About Marshalls (LON:MSLH)
Established in the late 1880s, Marshalls plc is a leading UK manufacturer of sustainable solutions for the built environment. It operates through three trading divisions: Landscape Products; Roofing Products; and Building Products. At a Group, divisional and brand level, Marshalls’ strategy centres around its customers who value its unique set of capabilities, namely leading brands, best in class technical and design support and carbon leadership. This is underpinned by business wide enterprise excellence, leadership in ESG governance and standards and its people, organisation, and culture.
