"Installer order books in our Domestic end market are encouraging at 9.1 weeks and our lead indicator for overall Public Sector and Commercial demand is mildly positive.
"Our markets have stabilised in the period and our marketing and sales initiatives are delivering positive results. However, economic uncertainties remain and Marshalls remains realistic about the short to medium term outlook."
Taken from Marshalls' half yearly results.
The landscape material manufacturer says that it has completed restructuring and its commercial and public sector markets improved 3% and although they remain cautious about the short term future, they are now ready to 're-optimise' production.
The group took a hit of £2m due to the bad weather last January and says that its domestic market 'remains flat' - operating profit margin was reduced to 5.2%.
Highlights:
- Half-yearly results in line with expectation despite £2m one-off cost from severe weather in early 2010.
- Dividend maintained at 1.75 pence per share reflecting the stabilisation in our markets
- Major restructuring complete
- Retained national manufacturing and distribution capability and reinforced our lowest cost to market position
- Increased operational flexibility to respond to changes in market conditions
- Net debt reduced further to £66.7m representing gearing of 35.9 per cent. Interest cover was 6.9 times.
Comment: It's a no brainer that public sector and commercial sales will increase as the 2012 Olympics gets closer and I'm certain that sales will be robust for any company involved with the supply chain.
What still concerns me is the domestic landscaping market. Whilst Marshalls say their installer order books are ahead, we are moving closer to the winter, coinciding with what appears to be a general market drop.
I remain convinced that we will see a double-dip recession and coupled with the effects of the government cutbacks - yet to impact consumer spending - I feel the general domestic landscaping market is still to experience its greatest slowdown.
Are you a landscaper and are you optimistic or cautious about the short to medium term future?
Marshalls are sponsors of the Landscape Juice Network.
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