Travis Perkins PLC's (LSE:TPK) margin squeeze is not going to abate quickly, analysts at Peel Hunt have predicted.
The builders' merchant today reported sales rose almost 9% in 2022, but underlying profits dropped 16% including costs for 400 job cuts and 19 branch closures.
Management is already planning for volume declines in 2023 of the order of mid-high single digits, noted the Peel Hunt analysts, with some variation across end markets and new residential likely to be worst impacted.
Price inflation is expected to moderate, but the group is not forecasting any notable deflation in manufactured products, and another high single-digit increase is therefore expected, they added.
In short, it’s a tough backdrop said the analysts, which kept an 'add' rating and a 1,030p price target on Travis Perkins.
The FTSE 250-listed shares were down 4% at 1,008p in morning trade on Tuesday.