Marshalls benefits from building upturn

INCREASED activity by housebuilders and higher spending by local authorities on concrete paving blocks helped Marshalls, the building materials company, to report a 59 per cent jump in pre-tax profits for the six months to September, writes Tom Stevenson.

However, Andrew Marshall, chairman, warned that there had been further declines in commercial construction work. He added that overcapacity continued to squeeze margins in clay bricks.

Pre-tax profits of pounds 10.2m ( pounds 6.4m) were struck from a 10 per cent increase in sales to pounds 102m. Earnings per share emerged at 3.87p (1.85p) and the interim dividend was maintained at 1.25p.

Concrete and stone products, the core of the group, increased operating profits by 17 per cent from pounds 7.5m to pounds 8.8m on sales 10 per cent higher at pounds 78m. Profits from bricks more than doubled from pounds 515,000 to pounds 1.3m, but Mr Marshall said that the return from assets employed was still unacceptable.

Marshalls' US operations, acquired in 1987, continued to make losses, due mainly to the poor performance of two concrete block businesses. A profitable paving business in Florida benefited from increased housebuilding.

The shares, which have doubled in value over the past 12 months, closed 9p higher at 118p.