Travis Perkins profits tank on weak sales, impairment charges

(Sharecast News) - Travis Perkins barely broke even in 2024 as the building materials group had to contend with falling volumes and prices and an underperforming merchanting business, as well as £139m in impairment charges. The company, which saw its chief executive Peter Redfern step down last month due to ill health, paid a final dividend of 9p, up from 5.5p the year before, though the full-year payout of 14.5p was still 19.4% lower than 2023.

Revenues over the 12 months to 31 December were down 4.7% at £4.61bn, which Travis Perkins blamed on a weak performance in the merchanting division, which accounts for more than 80% of the overall business.

Merchanting sales were 6.2% lower at £3.79bn due to price deflation and declining volumes, arising from the "depressed levels of UK construction activity and an intensely competitive backdrop", the company said.

Adjusted operating profits were down 23.2% at £152m. However, when excluding adjusting items - which included impairments in certain merchanting branches and restructuring actions, as well as write-downs in its stairs, floors and doors company Staircraft - operating profits totalled just £2m, down from £161m in 2023.

Looking ahead, chair Pete Redfern said that, with more resources re-deployed into customer-facing roles, the company was now "better placed to benefit from returning demand" in the UK construction market - whenever that recovery happens.

"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."