DETERIORATING activity in an uncertain market has forced building supplies plc Travis Perkins to downgrade its profit forecast for the current year.
The Northampton-based firm is now predicting operating profit of between £175 million and £195 million in reaction to the slowdown in new build housing and in renovation, maintenance and improvement.
Sales revenue is down by just under 2% for Q3 on the previous quarter and by 3.4% compared to Q3 of 2022. Pricing also fell by just over 3% due to inflationary pressure on commodity products which significantly impacted on gross profit and margins, including the impact of selling through existing stocks at lower market prices, the company said.
All merchant businesses have been focused on driving volume by delivering great service and competitive prices for customers, it added. This has resulted in a positive response from customers and, as a consequence, volume performance improved to flat year on year in the quarter.
Chief executive Nick Roberts (main picture) said: “In this environment, our priority has been to ensure that we deliver for our customers, both on service and pricing, as we seek to retain and grow our customer base for the medium to long term. This is the right approach, demonstrated by our ability to maintain volumes in this difficult market. However, this has impacted on our trading margins.”
Travis Perkins will continue to focus on meeting customers’ needs on pricing and service in order to be well positioned when market conditions improve, Mr Roberts added.
“Market conditions remain challenging with continued weakness across new build housing and domestic RMI. Deflation on commodity products has also been greater than we had anticipated,” he said.
“With a strong balance sheet and leading customer propositions, we remain confident in our future prospects and work continues to position the group to benefit from the long-term structural drivers across our end markets, particularly with the need to decarbonise the built environment and to build more homes in the UK becoming ever more pressing.”
