Marshalls Expects 2025 Profit In-Line, 2026 Outlook Uncertain

Marshalls (LON: MSLH) has released a trading update for the year ended December 31, 2025, anticipating adjusted profit before tax to align with market expectations.

However, the company tempers enthusiasm with a cautious outlook for 2026, citing continued uncertainty in end markets.

The group reported revenue of £632 million for 2025, a 2% increase year-on-year. This growth mirrors trends previously reported in November. Strategic progress is noted, particularly regarding the ‘Transform & Grow' strategy, with the Landscaping Products improvement plan on track to deliver £11 million in annualised cost savings. The balance sheet remains robust, with pre-IFRS16 net debt at £138 million.

Divisional performance varied. Landscaping Products saw a 1% revenue decrease to £266 million, reflecting volume growth offset by price investment and mix impact. Building Products revenue increased by 4% to £172 million, driven by strong Water Management performance, though Bricks softened. Roofing Products experienced a 4% rise to £194 million, fueled by significant growth in Viridian Solar, though Marley revenues contracted in the second half.

The Landscaping Products improvement plan yielded encouraging results, driving volume and market share growth. Network optimisation, including exiting UK quarried natural stone processing, concluded as planned, expected to deliver £11 million in annualised savings, with £3 million realised in 2025.

The group maintains a strong financial position, with pre-IFRS16 net debt of £138 million and £125 million of headroom on its syndicated bank facility. This liquidity supports strategic and operational growth plans.

Despite subdued end markets and pre-Budget uncertainty, Marshalls expects full-year adjusted profit before tax to meet market expectations. The board remains focused on operational improvements via the ‘Transform & Grow' strategy, anticipating improved financial performance in 2026 despite expecting no significant market activity improvement.

The company will announce its full-year results on March 16, 2026.

CEO Simon Bourne commented, “Marshalls delivered a resilient performance, evidenced by a return to revenue growth despite the challenging market backdrop, and delivering profits in-line with the market's expectations.

“We have made good progress with our ‘Transform & Grow' strategy and with an increased focus on execution, I am confident that the Group is well positioned to benefit from a market recovery and structural growth drivers over the medium term.”

The company compiled consensus for adjusted profit before tax is £43.6 million.