Figures for the half year ended June 30 show virtually flat revenue of £211.1m (2007: £209.9m).

Operating profit fell by 12.2 per cent from £30.5m at the same stage last year to £26.8m while profit before tax was down 17.1 per cent to £22.7m (2007: £27.4m).

The interim dividend is unchanged at 4.55p.

The company said it was focusing on the public sector and commercial market which, at approaching 60 per cent of group revenues, remained robust.

The smaller domestic market was more challenging, the firm admitted.
Like-for-like sales to the public sector and commercial market were nine per cent ahead of those at the same stage a year ago while like-for-like sales to the smaller domestic market were down by 10 per cent compared with 2007.

Huddersfield-based Marshalls said the accelerated closure of two manufacturing units - at Cannock and Sawley - would reduce its fixed cost base by £3.5m.

A one-off charge of £8m was expected in the second half, of which £3.5m was cash.

Sale of surplus properties contributed £2.2m to profit and realised £11.1m in cash which had been used to fund growth capital and investments.

Graham Holden, chief executive, said: "Marshalls has an experienced management team which, in response to the difficult market environment, has moved swiftly to refocus the business and reduce the cost base.
"Our balance sheet is strong, our business is well invested and our brand recognition is high.

"The public sector and commercial market is robust with good visibility and we are applying our energies to the sales opportunities, whilst continuing to serve the quieter domestic market."

Marshalls said it would continue to pursue selected growth investment and bolt-on acquisition opportunities "where they will add long term value to the group".

It had previously reported that it expected to realise cash of between £15m and £20m over the medium term from the sale of surplus assets.