Shares in Travis Perkins (LSE:TPK) fell 5.7% to 515p on Tuesday morning as the UK's largest distributor of building materials reported that persistently weak construction activity had weighed on its core merchanting business.
Group revenue fall 1.7% on a like-for-like basis in the three months to 31 March.
The merchanting division, which supplies trade customers including builders and contractors, posted a LFL revenue decline of 2.3%, with volume down 3.3% despite a 1.0% contribution from price and mix improvements as the business passed through manufacturer price increases.
Total merchanting revenue fell 4.2%, with the additional drag reflecting the disposal of Staircraft in 2025.
Toolstation UK provided a partial offset, delivering like-for-like revenue growth of 2.6%, with the company citing maturity benefits from its store estate and margin improvement through range development.
Toolstation Benelux was the weakest performer, with like-for-like revenue down 7.1% and total revenue declining 7.0%.
Travis said the group remains focused on managing overheads and identifying further operational efficiencies, while continuing to generate incremental cash and maintain capital discipline.
The company made no change to its broader financial outlook, though the update offered little near-term optimism on UK construction volumes, with activity levels described as remaining subdued.
Broker Peel Hunt noted that the business is "making progress in passing through price increases from suppliers (with more to come in May) and is maintaining market share".
A review of strategic options for Toolstation Benelux is still ongoing and "an exit seems increasingly likely, in our view".
With the market backdrop remaining challenging, despite price inflation that is "likely to be helpful through the rest of the year", market volumes are expected to drift lower, and the broker Peel sees risks to the current consensus forecast for adjusted operating profit of £141 million.
"The group continues to focus on its own operations, reducing costs where possible and focusing on cash generation," it added.
"The latter, alongside the group’s strong balance sheet, remains a key source of differentiation, and we remain optimistic that the business can deliver a successful operational turnaround, even in a weaker market."
** UPDATE: Adds share price and broker comment **