PAVING stone supplier Marshalls warned of further job cuts as it reported a £10m hit from the wash-out weather.
The Birkby-based group said some of its 2,300 employees would be affected by plans to save £4m a year as part of efforts to tackle sliding sales.
Marshalls, which has operations at Elland and Brighouse, said sales to the home improvement market slumped by 14% in the second quarter – usually a key trading period for the group – after record rainfall led to projects being put on hold.
Overall revenues in the six months to June 30 were 5% down on a year earlier at £167m following the second quarter knock.
Marshalls, which makes stone and concrete products for the construction, domestic and landscaping markets, is reshaping the business to cut costs – with £1m in savings due by the end of 2012.
Chief executive Graham Holden said all areas of the business were being looked at to make cost savings.
Job losses are expected to affect only a “small percentage” of its workforce, he added.
Thirty jobs are set to go at Huddersfield-based paving company Marshalls plc.
The trading update comes just weeks after Marshalls revealed it is in talks with unions about proposed changes to shift patterns which are likely to mean the loss of 30 jobs at the group’s West Lane site in Southowram due to reduced demand.
Shares slumped yesterday as analysts cut their full-year forecasts in the light of the latest update.
Panmure Gordon lowered its expectations for pre-tax profits by £2m to £10.5m following downgrades in May when Marshalls first revealed the impact of wet weather on sales.
But Chris Millington, analyst at Numis Securities, said: “Whilst it is disappointing to downgrade estimates, we believe that the tough trading environment will be impacting Marshalls competitors at least as much which means that the group should emerge as the clear winner in its industry.”
Marshalls’ cost-cutting plans come as the group also battles against tough conditions amid the recession.
It said recent building industry forecasts estimate a 2.9% drop in construction output this year and a similar fall next year.
Marshalls offered some positive news for its domestic market, with installation order books standing at nine weeks against seven-and-a-half weeks in April – although this is partly due to a backlog of work postponed due to rain.
Its larger division targeting the public sector and commercial market, which accounts for about 64% of sales, has been less affected by weather with sales down by 2% in the first half. Marshalls said that figure was broadly in line with expectations.
Mr Holden said: “The group is focusing its sales effort on market sectors where activity is strongest, accelerating cost reduction initiatives whilst continuing to invest selectively for future growth.
“The targeted growth plans, cost reduction initiatives, strength of the installer order book, resilience of the commercial end market and the opportunities created by the group’s international growth strategy should continue to mean that Marshalls is well-placed to outperform the market.”
Marshalls will announce its results for the first six months of 2012 on Friday, August 31.