Travis Perkins profits slump as construction sector remains ‘uncertain’

The London listed company Travis Perkins has announced profits have slumped by nearly a quarter.

Weaker pricing and falling demand has impacted the company and Travis Perkins is facing a “challenging” year as there is less demand in the sector.

The builder’s merchant has warned the construction sector remains “uncertain and will likely need further cuts to interest rates and an uplift to consumer confidence levels to stimulate a meaningful increase in demand.”

The company reported revenues fell 4.7% to £4.61 billion last year due to price deflation and less trading volumes and there was a 6.2% slump in revenues from the merchant arm due to “depressed levels of UK construction activity,” Travis Perkins announced.

The Toolstation business said revenues rose by 2.5% in the year after opening 17 new sites and adjusted operating profits fell by 23.2% to £152 million.

Geoff Drabble, chair of Travis Perkins, said, “Whilst uncertainty remains regarding the strength and timing of a recovery in UK construction activity, with more resources re-deployed into customer-facing roles, the group is now better placed to benefit from returning demand.

“This will be supported by disciplined capital allocation, focused on upgrading and protecting our core competitive advantages, and a clear customer-focused strategy owned by the leaders of the business.

“I am confident that this approach will provide attractive returns for shareholders over the medium-term.”