Builders merchant says 鈥渨eak demand鈥� 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 拢150m and in a note, broker Investec said: 鈥淭he 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%.鈥�
It said 鈥渨eak demand鈥� in the housing and RMI markets meant first half revenue fell 4% to 拢2.4bn while pre-tax profit slumped 82% to 拢15.6m.
Outgoing chief executive Nick Roberts said: 鈥淭rading 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.鈥�
Roberts is being replaced by former Taylor Wimpey boss Pete Redfern next month.
Travis Perkins said 拢32m of adjusting items in the six months to June, which included spending 拢24m on closing down several distribution centres and cutting staff numbers, saw operating profit fell 64% to 拢38m.
Meanwhile, insulation and building products supplier SIG posted a pre-tax loss of 拢11.3m on revenue down 7% to 拢1.3bn for the six months to June. In the same period last year it made a pre-tax profit of 拢12.2m. SIG鈥檚 revenue in the UK was down 9% to 拢553m.
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