Marshalls plc swings to a loss in the fiscal first half on restructuring costs

Marshalls plc swings to a loss in the fiscal first half on restructuring costs
Written by:
Wajeeh Khan
15th September, 11:04
  • Marshalls plc swings to a loss in the fiscal first half on restructuring costs.
  • The British manufacturer's revenue saw a 25% year over year decline in H1.
  • Marshalls’ debt was 1% higher as of the end of the fiscal first half.

Marshalls plc (LON: MSLH) revealed to have swung to a loss in the fiscal first half on Tuesday. Following the downbeat performance, the company’s board decided to skip an interim dividend in a bid to shore up finances amidst COVID-19 that has so far infected more than 370 thousand people in the United Kingdom and caused over 41 thousand deaths.

Shares of the company opened about 2.5% up on Tuesday. But the stock slid about 7% in the next hour to hit an intraday low of 637 pence per share. Marshalls plc is currently trading more than 25% down as compared to its per-share price at the start of 2020. Trading stocks online is easier than you think. Here’s how you can buy shares online in 2020.

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Marshalls says signs of recovery were evident in recent weeks

Marshalls, however, expressed confidence that signs of recovery were evident in recent weeks despite uncertainty in demand due to the ongoing health crisis. The British manufacturer reiterated its commitment to repay £9 million that it received earlier this year under the state-backed furlough scheme.

The company expressed plans of cutting its workforce by about 15% jobs representing roughly 400 people in May. As of Tuesday, it said, the restructuring has been completed. Marshalls also closed several of its Premier Mortars sites and three of its UK-based manufacturing facilities.

The restructuring results in additional costs of £17 million that pushed the Elland-based company into a statutory loss in the fiscal first half that concluded on 30th June. Its annual fixed costs, however, will decline by £12 million due to the restructuring, as per Marshalls.

Marshalls’ debt was 1% higher at the end of the fiscal H1

At £210 million, Marshalls’ revenue saw a 25% year over year decline in the first six months of the current fiscal year. It reported £16 million of loss in H1 that was significantly lower than £37 million of statutory profit in the comparable period of 2019.

Its operating profit amidst the pandemic plummeted 91% in the first half to £3 million. At £98 million, Marshall’s net debt was about 1% higher as of the end of the fiscal H1. In separate news from the UK, JTC plc said its revenue jumped 15% in the fiscal first half.

At the time of writing, the British manufacturer has a market cap of £1.28 billion and a price to earnings ratio of 21.95.

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