Travis Perkins to cut 600 jobs
Travis Perkins, the Northampton supplier of building materials, says it is set to close 30 branches and make 600 people redundant as it issued a profit warning this morning.
The firm blamed its disappointing performance on its plumbing and heating business.
Travis Perkins, which also owns Wickes, BSS, Toolstation and Tile Giant said it expected core earnings to be slightly below its forecast of £415m.
The firm also said it was uncertain about the the outlook for 2017 as it reported third quarter total sales growth of 3.4% and underlying growth of 2%.
John Carter, chief executive, said: “General Merchanting delivered a solid result in the third quarter alongside very strong performances in our Consumer and Contracts businesses where we materially outperformed our markets.
“Our Plumbing & Heating results were disappointing and whilst market conditions have worsened, we are not satisfied with our performance and will commence reviewing these operations. Our operational focus remains on improving all of our customer propositions, optimising our networks, intensifying our use of space and exploiting the scale advantage we have created. We expect this focus to underpin our outturn for 2016, albeit with Adjusted EBITA slightly below current market consensus of around £415 million”.
“It is still too early to predict customer demand in 2017 with certainty and we will continue to monitor our lead indicators closely. Given this uncertainty we will be closing over 30 branches and making further efficiency driven changes in the supply chain, resulting in an exceptional charge of £40-50 million this year.
“We have a proven track record developed over many years of taking swift action to take advantage of opportunities as they arise in whichever part of the cycle we find ourselves. The strength of the Group’s balance sheet and the competitive advantage we have created through the investments we have made position us well to continue outperforming the markets we compete in and drive shareholder value over the medium term.”
Travis Perkins said it will also close ten smaller distribution and fabrication centres, and write off of certain IT legacy equipment.
