The company recorded a big drop in profit before tax to R888000 from R1,7m in the corresponding previous period. Headline earnings fell to 1,9c a share from 4,5c.

 The company's headline earnings plummeted 72% to 6,6c a share in the full year to December 2002, mainly due to the rand's appreciation, the company said.

 Marshalls said its performance in the six months to June resulted from reduced rental income after the sale of a retail property complex in Cape Town for R7,76m.

 The proceeds were being used to reduce long-term and short-term borrowings, said director PN Lonsdale.

 Some of the company's long-term leases for commercial buildings had been renewed at reduced but marketrelated rentals, also contributing to decreased income from rentals.

 It expected to improve its performance in the second half of the year.

 Lonsdale said additional parking contracts had been signed, which would raise rental income.

 Marshalls' share price closed unchanged at 158c yesterday.