Travis Perkins (LSE:TPK) has warned that its profits will be much lower than previously forecast due to weak demand and higher interest rates hitting both the new build housing and refurbishment markets.
“In light of ongoing challenging market conditions, full-year adjusted operating profit now expected to be around £240mln,” the builders’ merchant said in a trading update.
In 2022, adjusted operating profits were £295mln.
The company said that an anticipated easing of market conditions in the second quarter to date has not occurred.
Confidence has been impacted “by higher interest rates and weaker consumer confidence driven by persistent, higher than anticipated consumer price inflation”.
Trade demand - commercial, industrial, infrastructure and public sector housing – is holding up better while Toolstation continues to perform in line with expectations, it added.
Tavis Perkins noted that the ongoing focus will be on delivering operational efficiencies in the business and targeted investment for when the market turns up.