Marshalls PLC (LON:MSLH) has said it is not proposing an interim dividend after slumping to a first-half loss.
The company noted that recent trading has been better than expected and continues to improve despite the market demand remaining uncertain due to the coronavirus (COVID-9) pandemic.
READ: Marshalls completes permanent site closures without affecting capacity
The FTSE 250-listed group also said it expects to repay the £9mln received under the government’s furlough scheme.
The paving group has completed a restructuring announced earlier this year, laying off 15% of its employees or around 400 people, and permanently closing three manufacturing facilities and a number of Premier Mortars sites.
The programme cost £17mln, which contributed to a statutory loss in the six months to June 30, 2020, but it is expected to cut yearly fixed costs by £12mln.
In the first half of the year, Marshalls' revenue dropped by 25% to £210mln while last year’s £37mln statutory profit turned into a £16mln loss due to a 91% slump in operating profit to £3mln amid the pandemic.
Net debt at period-end was 1% higher at £98mln.
"Like most building companies Marshalls had a difficult first half with profits down sharply. However, activity has bounced smartly since and August was back to 2019 levels," analysts at Peel Hunt noted.
"Good cash control has kept the balance sheet in healthy shape while the decision to repay the furlough cash gives management freedom on investment and dividend decisions in financial year 2021."
Shares dipped 1% to 664.76p on Tuesday morning.
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