Travis Perkins (LSE:TPK) shares fell to their lowest in almost 16 years after results showed a 99% fall in operating profit last year as it faced lower market volumes and underperformance in its builders merchanting segment.
The FTSE 250-listed construction sector supplier also said the timing of a recovery in the sector remains hard to forecast and lowered its outlook for 2025.
Overall, guidance was for flat operating profit and low property profit, implying an adjusted operating profit of circa £144 million, which analysts said was 22% below the City consensus forecast.
For the 2024 calendar year, group revenue fell 4.7% to £4.6 billion, adjusted operating profit dropped 23.2% to £152 million and reported operating profits crashed £99% to £2 million.
This reflected adjusting items of £139 million, including impairments in Staircraft and certain Merchanting branches and restructuring costs, of which £20 million were cash items.
On a statutory basis, the business swung to a £77 million loss before tax, from a £38 million profit the year before.
On the plus side, Toolstation UK delivered 48% growth in adjusted operating profit, helped by stronger sales, better gross margins and operational efficiencies. Toolstation France was closed and the Benelux operations were said to be on an accelerated path to profitability.
Net debt before leases was reduced by £123 million, supported by improved stock management and lower capital spending. The company also raised £125 million in March 2025 through a US private placement.
Last month, CEO Pete Redfern resigned due to ill health, with the board still searching for a permanent successor and chair Geoff Drabble supporting the management team in the interim.
“Several initial steps have been taken under Pete Redfern’s leadership to begin rebuilding trust and confidence,” Drabble said. “Following Pete’s resignation, the priority is to ensure this work continues at pace.”
He added: “While uncertainty remains regarding the strength and timing of a recovery in UK construction activity, with more resources re-deployed into customer-facing roles, the group is now better placed to benefit from returning demand."
The shares fell 11.5% to 486.60p, the lowest since 2009.
** Update: Adds share price and outlook details **