Builders’ merchant Travis Perkins will shed as many as 600 staff across the UK amid an “uncertain UK outlook” for next year.
Britain’s biggest supplier of building materials, led by chief executive John Carter, said yesterday that it will close more than 30 branches as well as ten smaller distribution centres.
“It is still too early to predict customer demand in 2017 with certainty and we will continue to monitor our lead indicators closely,” Carter said in the company’s third-quarter trading update.
“Given this uncertainty we will be closing over 30 branches and making further efficiency-driven changes in the supply chain, resulting in an exceptional charge of £40 million-£50m this year.” Shares in Travis Perkins shed 4.4 per cent to 1,422p.
The fortunes of the group are closely tied to housing transactions and consumer morale. Confidence in the sector has been hit in the wake of the Brexit vote, leading rival building supplier Wolseley to announce last month that it will close about 10 per cent of its UK branches.
Travis Perkins is putting its plumbing and heating division under review after “disappointing” trading results, with sales down 4 per cent.
The bulk of the closures are expected across its BSS and PTS chains, although a company spokesman could not say how many outlets, if any, there were in Scotland.
Though workers affected have been informed, the spokesman also said the group is not yet releasing the UK locations of sites due to be shuttered.
Some outlets of Travis Perkins and Benchmarx will also close, but the Wickes DIY chain will not be affected. General merchanting enjoyed better in the third quarter – with “very strong performances” by Wickes and Toolstation – with overall like-for-like sales up by 2 per cent.
Total sales across the UK rose by 3.4 per cent in the third quarter. However, the impact of the struggling heating and plumbing business will shave core earnings for the current year to “slightly” less than the market consensus of £415m, Travis Perkins said.