Marshalls today warned that full-year profit will be slightly below market forecasts following a drop in demand for landscaping products from struggling households hit by soaring energy prices and inflation.
Its Marshalls Landscape Products division saw revenue fall 6% to £311m in the nine-month period to 30 September 2022, with the rate of contraction rising to 16% for the third quarter alone, due to a “marked softening” of demand for private housing market repair, maintenance and improvement (RMI) in both the UK and international markets and destocking in the distribution channel.
AJ Bell’s Russ Mould said: “In recent years there has been a trend for households to dig up the front garden and replace the weeds with paving stones, so they can park their car and not worry about traffic wardens. As a paving stone specialist, Marshalls enjoyed booming sales, also helped by plenty of activity among its corporate customers. Part of this sales momentum has now disappeared.
“Marshalls’ shares took another tumble on a new earnings warning, meaning they are now down 72% since September 2021. Its landscaping products business is heavily exposed to repair, maintenance and improvement trends in the private housing market, and demand is dropping. For anyone watching their pennies, it’s an easy decision not to splash many thousands of pounds to get the front drive spruced up.”