Double-digit percentage drops in first-half sales and profits at Marshalls may not look great, and management’s forecast that profits for the full-year will be ‘broadly’ in line with expectations suggests that trading is still difficult, but this is no great surprise, given the shares trade no higher than they did in 2015.

That suggests a lot of bad news is already in the price, especially after a dividend cut for 2023 and a profit warning for 2024, and we continue to suspect that the market is underestimating the potential for a profits recovery at the masonry, mortar, paving, walling and pitched roof expert.

A forward price/earnings ratio of slightly over 22 for 2024, coupled with a forecast yield of 2.4pc, may not immediately imply there is value to be had here, either. But the soggy state of the UK economy as it tentatively emerges from 2023’s shallow recession does not help here, and both earnings and the dividend are depressed as a result.

This means that Marshalls’ valuation could be deceptive, and it may give the company little credit for any potential recovery in sales, earnings or dividends.

Marshalls made nearly ￡58m in net profit in 2019, just before the pandemic, and the dividend reached 15.6p a share in 2022. A return to anything like those levels would leave the stock looking cheap on both an earnings and a yield basis.

Lower interest rates and a more robust economy could yet provide a welcome boost to demand, and, in the meantime, the company continues to cut both costs and debt. Less borrowing means less risk and less risk can mean a higher share price, or at least a higher multiple of earnings for the stock, all other things being equal.

All eyes will now turn to the investor day scheduled for November, when relatively new chief executive Matt Pullen will get to outline how he intends to build the company’s momentum via a new five-year plan.

Questor says: buy

Ticker: MSLH

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Update: Just Group

First assessed at barely 75p, Just Group looks to be on a roll and the first-half results suggest there could be further capital gains and dividend increases to come.

Return on equity is now comfortably in the mid-teens percent, the dividend is growing, and management now feels confident enough to upgrade its prior forecast that profits would double by this year compared to 2021’s outturn of ￡211m.

All of this is giving the shares a boost to a six-year high, but the damage done by more than a decade of zero interest rates, not to mention the pension freedoms introduced by then chancellor George Osborne in 2014, mean the stock still trades well below its 2013 flotation price. Even more intriguingly, shares in the firm formerly known as Just Retirement and JRP Group still change hands at a very sizeable discount to the company’s tangible net asset value (NAV) per share figure of 240p.