Builders merchant says “weak demand” eats into numbers
The slowdown in the housing market and wider construction sector saw builders merchant Travis Perkins warn that full-year profit will be down on previous expectations.
The firm said its full year adjusted operating profit is now projected to be about £150m and in a note, broker Investec said: “The group is lowering profit guidance for the full year; while not a complete surprise, the scale of the reduction is greater than expected. We would expect consensus full year profit expectations to be cut by around 10-12%.”
It said “weak demand” in the housing and RMI markets meant first half revenue fell 4% to £2.4bn while pre-tax profit slumped 82% to £15.6m.
Outgoing chief executive Nick Roberts said: “Trading conditions have remained challenging through the first half of the year and we have continued to prioritise delivering for our customers whilst also recognising that a persistently lower volume environment means that we have to deliver a simpler, more efficient business.”
Roberts is being replaced by former Taylor Wimpey boss Pete Redfern next month.
Travis Perkins said £32m of adjusting items in the six months to June, which included spending £24m on closing down several distribution centres and cutting staff numbers, saw operating profit fell 64% to £38m.
Meanwhile, insulation and building products supplier SIG posted a pre-tax loss of £11.3m on revenue down 7% to £1.3bn for the six months to June. In the same period last year it made a pre-tax profit of £12.2m. SIG’s revenue in the UK was down 9% to £553m.
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