Travis Perkins’ trading results in its merchanting division for the first nine months of the year show positive increases in most areas, but the company expects a “more rapid decline in market activity” as the credit crunch bites.
Group turnover to the end of September rose 3.3% year-on-year, with turnover in its merchanting sector up by 3.1%, 2.1% in the general merchanting division and 4.9% for its specialist merchanting business.
This was aided by continued product cost inflation, while like-for-like turnover per trading day fell for each merchanting division by just over 1%.
Travis Perkins said it believed profits before tax and non-recurring items for the full year would be “at the low end of analysts’ expectations”, with the construction industry reacting to the “extraordinary turmoil in financial markets”.
As a result it will look to make operating cost cuts of up to £65m, reduce its debt burden and minimise non-recurring charges.
“We believe it is prudent to take early, more extensive action in view of the steeper decline in construction activity that is now materialising,” Travis Perkins said.
“These actions are aimed at strengthening the group’s financial and trading flexibility in more challenging markets.”
Travis Perkins group has added 82 branches to its merchanting network since the start of the year, which will help it grow its business in 2008, despite the difficult trading conditions being felt throughout the UK merchanting sector.
