Marshalls Shares Slide Despite Profit Growth as Outlook Stays Cautious

Marshalls (LON: MSLH) shares have declined Monday after the building products manufacturer posted half-year results showing improved profitability but warned of no material recovery in demand for the rest of 2026.

The stock hit a low of 175.1p per share at the start of the session, but is currently trading around 178.3p, down 1.8% from Friday’s close.

For the six months to 30 June 2026, revenue was broadly flat at £317.8 million, down 0.5% year-on-year, while adjusted operating profit rose 8.1% to £30.7 million. Adjusted basic earnings per share climbed 14.4% to 7.6p, and the interim dividend was raised 13.6% to 2.5p per share.

The improvement was driven largely by a turnaround in the Landscaping Products division, where a performance improvement plan lifted operating profit to £5.5 million from just £0.3 million a year earlier, as the business moves from “reset to delivery” and stays on track for £11 million of annualised cost savings by the end of FY26.

However, Building Products and Roofing Products both saw operating profit decline, weighed down by weak new-build housing demand, competitive pricing pressure in bricks, masonry and concrete roof tiles, and additional costs linked to Middle East conflict-related oil price surcharges.

Chief Executive Simon Bourne said the group delivered a “resilient” performance despite subdued markets, crediting sharper execution and financial discipline. Net debt fell to £136.8 million, with leverage of 1.7 times and cash conversion of 98%.

Despite the earnings beat, investors appeared unsettled by management’s caution: the company said it was not factoring in any material market recovery for the second half, with FY26 profitability expectations left unchanged.

The muted outlook, against a backdrop of persistent weakness in UK housing and construction markets, appears to have overshadowed the operational progress, pressuring the stock lower in early trading.