Builders merchanting giant Travis Perkins has reported some “very early signs of recovery” in key end markets but expects growth will be slow.
New chief executive of Travis Perkins plc Pete Redfern, commenting in the Group’s Q3 trading update, also said that the Group had allowed itself to become “distracted and overly internally focused” which has led to the underperformance in recent periods.
“We now need to get back to a focus on operational execution – delivering great products and great customer service and better leveraging our reach and scale,” he said.
Mr Redfern will combine the roles of Group Chief Executive and Managing Director of the Travis Perkins General Merchant business to allow a shortening of reporting lines and development of a new strategy.
The Q3 results show a -8.2% decline in sales on a like-for-like basis (compared to a year ago) in the Merchanting segment. The decline in revenue was driven by the General Merchant business which has seen a loss of market share over the summer.
The merchanting division saw a sales decline of 6.9% in the first nine months of the year.
Both volume and margin in the General Merchant have underperformed expectations with volume continuing to decline despite recent changes to optimise pricing.
More widely the market remains mixed, with ongoing competitive intensity in some of the Group’s Specialist Merchanting businesses but early signs of returning confidence in others.
The Toolstation business recorded 1% like-for-like revenue growth in Q3, and 0.8% growth for the first nine months.
Group like-for-like revenue declined by 6.8% in Q3. FY24 adjusted operating profit is expected to be around £135m.
Management expects to see positive growth in underlying markets over the next twelve months, but that this growth will be “slow and non-linear at the outset”, with the benefit to financial performance starting to be realised in the second half of 2025.
Mr Redfern said his immediate priorities were to drive and incentivise branch-led performance and motivation, identifying further ways to make the business run more efficiently and ensuring that “we turn and face the anticipated recovery in the UK construction market”.
