Marshalls PLC (LSE:MSLH) shares tumbled 22% on Friday after the landscaping and building products group warned of continued weak trading conditions and cut its full-year profit outlook.
The stock’s sharp fall came despite first-half revenue rising 4% to £319 million, supported by gains in its building products and roofing divisions.
However, the company said activity levels in its core landscaping markets softened from late May, and it does not expect any improvement for the rest of 2025.
Landscaping Products revenue fell 1% to £135 million, as overcapacity and price pressure continued to squeeze margins.
The group admitted profitability was hit by a weaker product mix, underused manufacturing sites and the need to cut prices to maintain market share.
Adjusted profit before tax is now expected between £42 million and £46 million, down from earlier forecasts.
Marshalls is accelerating cost-saving measures, including partial site closures and further rationalisation, aiming for £9 million in annualised savings. Management remains focused on long-term recovery, but expects current headwinds to persist into next year.
In the wake of the update, Peel Hunt cut its full-year profit target to £42 million from £56 million, along with its price target, which falls to 290p.
Panmure Liberum noted: "Management had hoped for an improved level of profitability in the second half - clearly this optimism is being pushed out to the right.
"On a more positive note, building volumes are benefiting from water activity and roofing is benefiting from ongoing growth in solar."
Panmure continues to rate the shares 'buy' up to 334p.
The shares fell 58.5p to 205.5p.