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Travis Perkins has lowered its full-year guidance after facing challenging market conditions and a “pronounced slowdown” in new build housing and domestic RMI activity in Q3.
In light of this, full-year adjusted operating profit is now expected to be in the range of £175m to £195m.
It comes as group revenues fell by 1.8% in the quarter, with like-for-like sales also down 1.8%.
Meanwhile, pricing declined by 3.1%, largely due to strong deflationary pressures on commodity products, which “significantly impacted” on gross profit and margins, including the impact of selling through existing stocks at lower market prices.
Nonetheless, Toolstation continued to see good growth across both the UK and Europe. Toolstation UK delivered revenue growth of 7% in the third quarter whilst Toolstation Europe saw revenue growth of 9%.
Whilst overhead inflation remains elevated, the group said it remains “focused on actions to minimise the impact on profitability”.
Nick Roberts, CEO, said: “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. 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 and is reflected in today’s revised guidance.”
He added: “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.”
