Builders merchant says pre-tax profit fell one third in first half

Falling workloads in the housing and RMI sectors sent profit tumbling at builders merchant Travis Perkins in the first half of the year.

Pre-tax profit was down 37% to £86m in the six months to June on revenue which was off 2% to just under £2.5bn, with the firm saying the numbers “reflect weak market volumes in private domestic RMI and new build housing”.

It said its merchanting business, the firm’s biggest, saw revenue fall 4.5% to just over £2bn with Travis Perkins saying it had been hit by inflation and rising mortgage costs.

travis perkins

Travis Perkins says trading conditions in the second half of this year will continue to remain difficult

It added: “The private domestic new-build market (19% of Merchanting revenue) saw substantial volume decline as the impact of rapidly rising mortgage rates quickly reduced new housing starts. This was more pronounced amongst the national housebuilders, with regional housebuilders remaining more active.”

Chief executive Nick Roberts said trading in the second half of the year would “remain difficult” and added: “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.”

It said that it expected full year operating profit to be around £240m, as the firm had previously guided, which would be down 16% on the £285m it posted in 2022.