Travis Perkins (LSE:TPK) PLC reported a 16% fall in operating profit for the past year despite a 9% increase in revenue, though this was mainly from lower property profit and higher restructuring charges as it laid off 400 staff and closed 19 branches.
It was described as a “challenging” year but a “resilient” performance for the builder’s merchant and owner of the Toolstation chain.
An operating profit of £295mln for the 2022 calendar year was down 16% on the previous year and short of the City consensus forecast of £318mln.
The £58mln shortfall compared to the previous year included £24mln of lower property profits and £15mln of restructuring charges that reflected the redundancies and closures of Merchanting outlets designed to save £25mln of costs in 2023.
Merchanting profits were improved as market share increased, while for Toolstation a stronger second-half performance did not prevent full-year operating profit coming in significantly lower than the prior year, following a tough first half and continued investment expansion in the UK and Europe.
On the outlook, the group is planning for a decline in overall market volumes in the mid to high-single digit range in 2023, in line with industry forecasts.
Product cost inflation is expected to moderate, though with no notable deflation in manufactured products currently seen, cost inflation is expected to be in the mid to high-single digit percentage range.
“Whilst the expected market dynamics point to a challenging year ahead, management continues to anticipate delivering a performance in line with market expectations,” the company said.