PAVING stone maker Marshalls warned of job cuts today as it reported a £10 million hit from the wash-out weather.
The Huddersfield-based group said some of its 2,300 employees would be impacted by plans to save £4 million a year to tackle sliding sales.
Marshalls revealed sales to the home improvement market slumped by 14% in the second quarter - usually a key trading period for the group - after record rainfall saw projects put on hold.
Overall revenues in the six months to June 30 were 5% down on a year earlier, at £167 million, following the second quarter knock.
Marshalls - which makes stone and concrete products for the construction, domestic and landscaping markets - is restructuring the business to cut costs, with £1 million in savings due by the end of 2012.
Graham Holden, chief executive of Marshalls, 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.
Shares dropped 9% on news of the rain-hit sales after analysts cut their full-year forecasts.
Panmure Gordon lowered its expectations for pre-tax profits by £2 million, to £10.5 million, 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 construction 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 around 64% of sales, has been less impacted by weather, down by 2% in the first half.
