Landscaping businessMarshalls will cut around 250 jobs as a slowdown in housebuilding has led to a slowdown in demand for its services.
The business will shut its factory in Carluke in Scotland, after like-for-like revenue fell by 13% for the first six months of the year and profit was down by 26.7%.
It is expected that the closure will save Marshalls £9 million. The job cuts will come on top of 150 layoffs announced last year.
Marshalls said this was due to “persistent weakness” in new build housing and home renovations. It expects this weakness to continue as high interest rates continue to discourage housebuilding.
The business said: “The sustained high levels of inflation, increasing interest rates and weak consumer confidence means that the board anticipates the group’s performance in the second half will be below its previous expectations.”
In recent months, new builds have fallen at rates only seen during the pandemic and the aftermath of the global financial crisis, as fast-rising interest rates discourage new starts.
“Whilst previously anticipating a recovery in market conditions in the second half of the year, the board is now of the view that an improvement in the second half performance is unlikely given the macro-economic backdrop,” the group said.
Investec analyst Aynsley Lammin noted that the profit warning comes after a strong run for the shares. They had been up 21% in the past month before falling by 9% to 251.2p today.
He said: “After the recent bounce in the shares, this update will come as a disappointment and the scale of the full year downgrade will be a negative surprise.”
