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Travis Perkins has seen its operating profit plummet 31% to £112m in the first half of the year, reflecting weak domestic and new build housing markets over the period.
Amid challenging market conditions, revenues also dipped by 2.5% to £2.47bn.
In light of a lower trading profit, the phasing of property profits and an increase in the UK corporation tax rate, adjusted earnings per share fell by 41% to 30.5p.
Despite this, merchanting saw “resilient” demand across commercial, industrial, infrastructure and public sector markets. However, performance was impacted by “significant” weakness in new build housing and private domestic RMI markets.
Toolstation meanwhile delivered market share gains, with revenues up by 9%, driven by network maturity benefits and a “focus on enhancing the trade customer proposition”.
In its latest update, the group said it has taken proactive cost actions, and that continued cost discipline “ensured that overhead inflation was mitigated”.
It has also maintained its previous guidance and expects full-year adjusted operating profit to be around £240m.
CEO Nick Roberts said: “Market conditions have been challenging, which is reflected in both our first half performance and our outlook for the balance of the year. The group remains focused on striking the appropriate balance between seeking to protect shorter term profitability, delivering our strategic objectives and being well placed to benefit when market conditions improve.
“Given the market backdrop, we are relentlessly focused on meeting our customers’ needs in core categories and supporting our local branch managers to grow share of wallet, particularly with general builder and professional trade customers, by making it simpler and easier to transact with us through our digital channels and in our branches.”
He added: “I am pleased with the continued progress we are making on the development of value-added services, as shown in the growth of Managed Services and Hire, and also with the market share gains coming through in Toolstation.
“Whilst near-term trading is expected to remain difficult, we continue to work to position the group to benefit from the long term structural drivers in our end markets. The opportunities presented by the requirement to decarbonise the UK’s built environment and address the shortage of both private and social housing remain significant and our unique portfolio of businesses, coupled with the development of innovative solutions for our customers, will enable the group to deliver long term growth and create value for shareholders.”
