Marshalls hit by rain and economy

Marshalls, the landscape and garden products firm, said a mixture of appalling weather and tough trading led to a seven per cent drop in revenue over the last year.

Current group trading is in line with expectations, the firm added in the update.

Revenue for the year ended 31st December 2012 was £309m, down from £334m the year before.

Sales to the Public Sector and Commercial end market, which represent approximately 63% of Marshalls' sales, were down 6%.

Sales to the Domestic end market, which represent approximately 32% of sales, were down 12% compared with the prior year period.

The group's international business continued to make steady progress, the company said, and was now approaching 5% of group sales.

"Despite the challenging economic background, Marshalls continues to target growth markets within the Public Sector and Commercial end market," the company statement said.

"Street furniture, water management and internal natural stone flooring are seen as particular growth areas, in addition to the continuing commitment to home, rail and retail."

A reorganisation of the firm in response to continuing uncertainty about the market environment had reduced both fixed costs and net debt, Marshalls said.

Cash realised from surplus property sales, accelerated inventory reduction and reduced capital expenditure is ahead of plan, it added.

This resulted in year-end net debt falling from £77m in 2011 to £64m in the last year.

This puts the company on track to meet its target net debt to earnings before interest, tax, depreciation and amortisation ratio of two times cover by the end of 2013.