The Huddersfield-based company has brought forward cost-saving plans and is in talks with unions and staff over closing concrete manufacturing bases at Cannock, Staffordshire, and Sawley in Nottinghamshire.

Although Sawley will be retained as a regional distribution centre, the group said the move was down to the current market conditions and inflationary pressure on input costs.

In a trading update for the six months ended June 30 - ahead of interim results which are due on August 29 - Huddersfield-based Marshalls said revenue was slightly ahead at £211m (2007: £210m).

Acquisitions had contributed £1m to group revenue and like for like revenue was maintained, with sales to the public sector and commercial market, which represent approximately 55 per cent of Marshalls' sales, nine per cent ahead of 2007.

However sales to the domestic market were down ten per cent.

The firm said: "In an increasingly uncertain market we continue to improve productivity and reduce our cost base. In the public sector and commercial market, demand remains robust and we are delivering good results.

"In the domestic market, we continue to strengthen the Marshalls brand and to develop our approved installer network with an increasing emphasis on lead generation."

The company said current market conditions and continued inflationary pressures on key input costs had accelerated its plans to streamline manufacturing capacity and reduce costs.

"These proposed actions should enable us to realise the productivity gains from our investments in automation over recent years, reduce our fixed cost base, reduce stock volumes and release cash," the firm said.

The changes are likely to involve a charge of around £8m which will be reported separately in the firm's Income Statement in the second half.

The charge includes asset write-downs of approximately £4.5m.

The cash cost will be approximately £3.5m and Marshalls said it expected the cash payback to be less than a year.

The company said it balance sheet remained strong. Borrowings at the end of 2008 were expected to be at a similar level to the end of 2007 and were expected to reduce in 2009.

The firm intends to maintain dividends to shareholders at 2007 levels - which would result in a reported dividend for the full year of 13.85p per share.

The statement concluded: "We maintain a strong emphasis on sales, cost reduction and cash management.

"The strength of our brand, our efficient manufacturing and sourcing, our comprehensive distribution network and our decisive actions to focus on cost reductions and cash management will maximise our short term performance in an uncertain market without prejudice to our longer term prospects."