Travis Perkins profit drops 80% amid weak market

Northants-based building materials supplier Travis Perkins has reported an 80% drop in profits and says it does not expect its performance to improve this year.

It reported post-tax profits of just £38m despite revenues of £4.8bn in 2023.

The company attributes this decline to reduced activity in new construction and home improvement projects, as well as increased overhead costs and declining commodity prices in the latter part of the year.

It has warned that it has “seen a continuation of the weak trading environment” in the first two months of the year. It is forecasting that its 2024 adjusted operating profit will be £160m-£180m, so at best matching 2023’s £180m figure and significantly below £295m generated in 2022.

Nick Roberts, chief executive officer, said: “With market conditions expected to remain a headwind through 2024, the business is fully focused on improving profitability and enhancing cash generation. We have successfully acted to optimise our cost base and are actively addressing the impact of our loss-making businesses. We are also accelerating changes to our operating model, leveraging our scale to create a simpler, more efficient business. This will be achieved by simplifying our operational structures, consolidating our supply chain, creating shared procurement capability, and embedding new technology.

“While the timing of recovery in our end markets is uncertain, the long-term growth drivers of our industry remain robust. The proactive steps we are taking to rebuild profitability and strengthen our balance sheet will create a more resilient business and, together with our strong customer relationships and differentiated offer, will see the Group well positioned to emerge stronger when markets recover.”