The parent company of DIY chain Wickes has posted a 67 per cent plunge in full-year profits due to the cost of branch closures and its struggling plumbing and heating business.
Travis Perkins, which also owns Toolstation, lost £57 million from costs incurred from its plan to shut more than 30 branches, putting 600 jobs in jeopardy leading to an overhaul of its supply chain.
However, this fee was nothing compared to Travis Perkins’ heating, plumbing and tile businesses, which racked up a £235 million impairment charge.
The company, which employs 28,000 staff, had initially warned over job losses and branch closures in October.
While Travis Perkins’ retail chains Wickes and Toolstation are not affected by the overhaul, the job losses will be felt at its trade brands Benchmarx, plumbing and heating businesses BSS and PTS and the eponymous Travis Perkins.
In its full-year report released today, Travis Perkins’ underlying earnings dropped by 21.7 per cent to £36 million in its heating and plumbing division, but its Wickes and Toolstation division saw underlying operating profits go up by 6.3 per cent to £101 million.
Chief executive John Carter blamed the “sharp decline” in the value of the sterling since the Brexit vote for his company’s financial performance.
“[It] has created cost pressures on imported goods and materials and the expectations for secondary housing market transactions and growth in the repair, maintenance and improvement market have weakened,” he said.
He added: “Any significant reduction in consumer confidence may have a more pronounced impact on big-ticket purchases such as kitchens and bathrooms which make up around 10% of the group’s sales.”