PAVING slab maker Marshalls slumped into the red in 2012 after a rain-soaked year that saw the group axe hundreds of staff and shut one of its plants.
The Huddersfield-based group today reported pre-tax losses of £11.2 million, against profits of £13.7 million in 2011, after bottom-line figures were hit by restructuring charges and as record rainfall put DIY projects on hold.
Marshalls said it cut 15% of its 2,300-strong workforce last year as part of efforts to save £7 million, while it also shut its Maltby paving plant in South Yorkshire.
Last year's relentless rainfall compounded already difficult trading conditions in the construction sector as firms were hit by wider economic woes.
But Marshalls said it was seeing signs of improvement in demand from commercial customers, in particular rail infrastructure and housing developers, while it added the domestic installer market was showing good order books.
With restructuring costs stripped out, Marshalls reported underlying pre-tax profits of £10.4 million, down from £13.7 million in 2011.
Revenues dropped 7% to £309.7 million.
It said cost-cutting helped minimise the profits impact, delivering around £2.8 million in savings last year.
Shares rose more than 3% as analysts praised the group's swift action to cut costs.
Mark Hughes at Panmure Gordon said: "Record breaking rainfall clearly had an effect on the business in 2012, but the company's strong balance sheet and flexible business model enabled it to undertake what now looks like a very sensible production and cost reduction programme."
He added there was "significant" scope for growth in its domestic market once the housing market fully recovers.
Sales to the home improvement and domestic market account for 32% of Marshalls sales, while the public sector and commercial market generates 64% of revenues with the remainder from its international business.
A slump in government funding for construction projects, such as schools and hospitals, saw sales in the commercial and public sector division fall 6% last year.
But its international arm delivered a rise in sales to £13.5 million from £11.7 million in 2011 and Marshalls aims to boost annual revenues to £35 million within two years.
