BUILDING products firm Marshalls has called on shareholders to help it raise £34m to bolster its balance sheet.
The Birkby-based supplier of stone paving said it was issuing new shares to raise the cash – which would be used to reduce its borrowings and avoid it exceeding current banking facilities.
Shareholders are being offered two new shares for every five existing shares they already hold at 65p.
The move comes as Marshalls, which also has operations at Lowfields in Elland, reported revenues down to £103m for the four months to the end of April 30 against £135m during the same period last year.
Marshalls, which sponsors the Chelsea Flower Show, has axed hundreds of jobs and closed four concrete manufacturing plants as part of cost-cutting measures.
The company said that its public sector and commercial market, which represented 59% of total revenue in 2008, was forecast to decline during the first half of 2009 before levelling out.
In contrast, the domestic market – supplying the DIY trade – had performed more strongly than expected, with encouraging trading during Easter.
In a statement, the company said: “We maintain a strong emphasis and priority on cash management and cost reduction.
“We believe that our market leading position, the strength of our brand, our efficient manufacturing and sourcing, our national distribution network and the decisive actions taken will maximise our short term performance in an uncertain market without prejudicing our longer term prospects.”
In March, Marshalls revealed a 46% fall in annual profits to £22.5m for 2008 as the tough trading climate hit demand. At that stage, the company said it was slashing dividend payments.
In January, Marshalls announced plans to close concrete plants in North Wales and Sussex, putting 135 jobs at risk. That follows the closure of concrete factories in Staffordshire and Nottinghamshire last year.
