Marshalls (LON:MSLH) reported a return to revenue growth in 2025, but profitability fell as a weaker performance in its Landscaping segment offset improvements elsewhere, according to management’s full-year results presentation.
New CEO Simon Bourne opened the call by emphasizing “strategic continuity” under the company’s Transform & Grow strategy, but said Marshalls is tightening its focus, increasing organizational pace, and embedding a stronger performance culture. CFO Justin Lockwood then detailed the year’s results, including lower operating profit and earnings, a reduced dividend under the firm’s policy, and a modest rise in net debt tied to working-capital normalization and payments of adjusting items.
2025 financial performance: revenue growth returns, profit declines
The proposed full-year dividend was reduced by 16% to 6.7 pence per share, which Lockwood said reflected the company’s dividend policy.
Adjusting items in the year totaled GBP 24.4 million, comprising GBP 10.3 million of amortization of acquired intangibles (described as recurring) and GBP 14.1 million of restructuring costs split broadly evenly between cash costs and asset impairments.
Segment results: Landscaping dragged, Roofing held up
At segment level, both Building Products and Roofing Products delivered 4% revenue growth, while Landscaping revenue fell 1%.
- Landscaping: Revenue fell 1% amid a “challenging market backdrop” with industry volumes still below historic norms. Management said it achieved 4% volume growth through improved customer relationships and new trading agreements, but this was offset by deliberate price reductions (a 1% revenue impact) and a product mix shift (a 4% revenue impact). Operating profit declined by GBP 10.1 million, leaving the segment “broadly breakeven” in 2025. Management also cited cost pressures from pay awards and higher national insurance contributions that were not offset by customer pricing, plus a “significant deterioration” in the natural stone processing business that led to a closure decision in the second half. Marshalls identified GBP 11 million of cost savings to be delivered by the end of 2026, with GBP 3 million delivered in 2025.
- Building Products: Revenue rose 4%, driven by growth in Water Management and Mortars, partially offset by lower Bricks revenue. Water Management benefited from residential and infrastructure demand, improved stock availability, and customer service. Mortars benefited from its service proposition and “relatively modest build rates” that favored ready-to-use products. In Bricks, Marshalls prioritized price over volume to protect gross margins, and management noted increased competitive intensity in the second half as housebuilding slowed. Segment operating profit fell 8% to GBP 13 million, with improved Water Management profitability offset by weaker Bricks profitability and reduced manufacturing efficiency. Lockwood also noted Roofing had lower property income versus recent years, reducing profits by about GBP 0.8 million.
- Roofing Products: Revenue increased 4%, driven by Viridian Solar, where revenue rose “about a third” as builders selected its products to meet energy-efficiency regulations. Growth moderated in the second half due to tougher comparatives, but management highlighted sequential growth with higher second-half revenue than first-half. Marley Roofing revenue declined due to market conditions and increased competitive intensity as new market capacity reduced concrete tile sales. Segment operating profit rose 2% to GBP 50.2 million, reflecting improved Viridian profitability, partially offset by weaker Marley volumes and manufacturing inefficiency that led to availability issues in certain product profiles. Marshalls said it launched targeted capital expenditure to improve resilience and efficiency of Marley’s concrete roof tile lines, a key focus for 2026.
Cash flow, debt, and balance sheet
Lockwood said EBITDA was GBP 85 million and cash conversion was 88%, but working capital was a cash outflow of GBP 12.5 million as working capital normalized. Marshalls also consumed around GBP 25 million in interest and tax, which was higher year over year due to timing normalization and arrangement fees on a new syndicated bank facility put in place in November 2025.
Capital expenditure was GBP 15.7 million, up about GBP 8.5 million year over year, reflecting increased investment in Marley’s concrete tile lines, Viridian office and warehousing, and water management capacity, alongside lower proceeds from site disposals. Adjusting items paid were GBP 10.9 million, including a GBP 6.6 million final Viridian Solar contingent consideration payment and restructuring cash costs.
Net debt increased by GBP 4 million to GBP 137.9 million. Leverage rose to 1.8x, while headroom under the new facility was GBP 125 million. Return on capital employed fell to 7%, and management reiterated its target to rebuild ROCE to 15% as the Transform & Grow strategy progresses and markets normalize. The company reiterated its plan to invest GBP 20 million to GBP 30 million annually, with 2026 CapEx expected at the lower end of that range, and a leverage target of 0.5x to 1.5x EBITDA.
Strategic update: tighter focus and margin rebuild plans
Bourne said the company is prioritizing fewer, higher-value activities and linking 2026 people initiatives directly to value creation. He described a flatter structure to improve accountability, clearer “frames of reference for trading,” and better visibility of commercial levers such as pricing architecture, customer and channel profitability, and cost-to-serve.
Within Landscaping, management said multi-year trading agreements were secured and pricing agreed for 2026, customer engagement scores improved by 15 percentage points, and share of wallet in yards was growing—“in some cases…beyond 85%.” The company said it gained just over 4% of overall market share during the year and cited supplier awards from two major partners. Management also pointed to a simplified portfolio, aligned pricing architecture, and a clearer NPD pipeline with launches planned for the second quarter.
On the path to rebuilding Landscaping margins, Bourne said Marshalls aims to deliver operating margins of at least 12% over time. In Q&A, management said achieving that target would likely require about 15% to 20% volume recovery for additional operating leverage, alongside initiatives under its control such as cost savings and commercial improvements.
Outlook and Q&A: pricing discipline, energy hedging, and regulatory tailwinds
Management said demand remained consistent with the fourth quarter of 2025 and noted weather headwinds. Bourne also said the company is mindful the Middle East conflict could affect energy prices. Lockwood added that Marshalls is hedged for “a little over 80%” of electricity and gas for the rest of the year, and that each $10 per barrel increase in oil above its central planning assumption of about $80 would cost roughly GBP 1.2 million.
In Roofing, management identified FP McCann’s market entry and capacity increases at Wienerberger as drivers of competitive intensity. Marshalls said it expects some older assets to be retired in 2026 and believes the net effect will still be increased market capacity by low single-digit percentages. Management said it had not lost customer relationships due to FP McCann’s entry, and reiterated medium-term Roofing margins of 20% to 24%.
On Landscaping pricing, management said 2026 price increases had been accepted and were intended to cover inflation, and it expects to maintain its price premium within the range previously discussed while avoiding drifting “away from the pack.”
For Viridian Solar, management said 2025 demand increased significantly due to Part L regulations and that ArcBox Fire Protection generated over GBP 2 million of revenue in 2025. Lockwood said the Future Homes Standard had not yet been published, but noted the Welsh version makes solar a functional requirement; he said this could potentially “up to a doubling of the market,” though timelines and details remain uncertain. Management expects growth in 2026 to moderate as the business becomes more cyclical with housing build rates.
Marshalls closed the presentation by reiterating confidence in its plan and stating 2026 would be “a year of delivery,” with sharper execution aimed at improving profitability and returns over the medium term.
About Marshalls (LON:MSLH)
Established in the late 1880s, Marshalls plc is a leading UK manufacturer of sustainable solutions for the built environment. It operates through three trading divisions: Landscape Products; Roofing Products; and Building Products. At a Group, divisional and brand level, Marshalls’ strategy centres around its customers who value its unique set of capabilities, namely leading brands, best in class technical and design support and carbon leadership. This is underpinned by business wide enterprise excellence, leadership in ESG governance and standards and its people, organisation, and culture.
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