£24.9 million profit before tax: that is the first-half 2026 result Marshalls plc (LON: MSLH) posted against revenue that barely moved, holding at £380 million as weak new housing and private repair, maintenance and improvement markets weighed on volumes. The figure rose 13% year on year. Operating profit advanced 8% to £30.7 million, with lower finance costs carrying the additional increment through to pre-tax income. Earnings per share rose 14% to £0.076; the board raised the interim dividend 14%, consistent with its two-times adjusted earnings cover policy.
Landscaping drives operating expansion
Landscaping Products contributed £5.2 million of operating profit improvement, the principal source of H1 group earnings growth. Chief Financial Officer Justin Lockwood said volumes in the segment declined 2% to 3%, product mix softened approximately 1%, and pricing absorbed the balance to keep segment revenue flat. The operating gain came from improved gross margins, lower manufacturing costs and reduced overheads under the division's improvement plan. Marshalls said it remains on track to deliver £11 million of annualized cost savings by year-end 2026, with the full amount now expected in the current year.
Market position strengthened alongside margins. The Landscaping division reported a 2.6-percentage-point gain in market share; net promoter scores rose 11 percentage points since 2025. Project quotation activity increased 15%, stock-keeping units fell 30% since 2025, and intra-site journeys dropped 19%.
Building and Roofing face volume and cost pressure
Building Products revenue fell just under 1%, with growth in Mortars and Screeds offset by lower revenue in Water Management and Bricks and Masonry. Segment operating profit declined £700,000 to £6.2 million, weighed by lower volumes, oil-related surcharges and weaker manufacturing efficiency. Lockwood said an extended site shutdown affected the period and is not expected to recur in H2.
Water Management generated approximately £80 million in revenue last year, roughly two-thirds from new-build housing. During H1, that mix shifted six to seven percentage points toward commercial and infrastructure channels. The business holds framework agreements with three water utilities, described as preferred-supplier access to design activity and investment plans rather than commitments to specific revenue.
Roofing Products operating profit fell £1.7 million to £23.1 million. Viridian Solar grew revenue approximately 7%, though adoption under 2021 building regulations matured and the pace moderated. Marley's revenue declined on lower concrete tile volumes and weaker manufacturing efficiency; Lockwood noted that clay tile share gains were partly aided by a competitor's extended kiln maintenance, a position he said could normalize in Q4 as competing capacity returns.
Balance sheet and the £112 million pathway
Pre-IFRS 16 net debt fell approximately £15 million year on year to £137 million, with leverage at 1.7 times EBITDA. Cash conversion reached 98%. Gross capital expenditure in 2026 is expected near the bottom of the £20 million to £30 million annual range; site disposals of £4 million to £5 million should reduce net capital expenditure to roughly £15 million to £16 million.
Management maintained full-year profitability expectations and reiterated a medium-term pathway to £112 million in operating profit, approximately double the 2025 level. The framework allocates roughly £17 million to self-help measures, approximately £14 million to structural growth in solar, water management and infrastructure, and about £25 million to cyclical recovery. That recovery assumption is 12% to 15%, not a return to 2022 volumes. The first-half net direct cost from the Iran conflict was approximately £1 million; Marshalls has no current plans to increase surcharges further.