UK's Marshalls flags weaker outlook after drop in new house building

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(Reuters) -Britain's Marshalls plc, a landscaping, building and roofing products supplier, said on Tuesday it expects to miss its full-year outlook due to a drop in new house building and home renovations, sending its shares down as much as 16.4%.

The company, which reported a 14% contraction in its revenue for the January-April period on a like-for-like basis, said it expects its full-year results to be lower than its original expectations.

The company did not provide further details on its full-year forecast.

Britain's housing market has slowed markedly over the last six months, weighed down by a steep rise in borrowing costs and heightened worries on the macroeconomic front, while falling house prices have squeezed margins for struggling housebuilders.

Shares of Marshalls were down 14% to 256.2 pence at 0830 GMT.

On a like-for-like basis, group revenue for the four months ended April 30 fell by 14%, the company said in a trading statement.

"2023 looks set to be tougher for Marshalls than we thought at the start of the year. However, it still looks like it will be the nadir of this cycle," analysts at Peel Hunt said in a note.

The group, which implemented cost cuts at the end of last year, said it had reduced about 70 indirect job roles in the business, which is expected to contribute to around 3.5 million pounds ($4.42 million) in annualised savings.

Peel Hunt added that the cost cuts should give Marshalls a profit bounce when housing volumes return.

Total group revenue for the period was up 12% to 227 million pounds from a year ago helped by the acquisition of Marley Group & Fundraising last year.

($1 = 0.7923 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Savio D'Souza, Janane Venkatraman and Christina Fincher)