// Travis Perkins axed 400 jobs and shut 19 branches at the end of last year as a slowdown in the construction sector hit profits
// It closed 19 branches in its general merchant and Benchmarx divisions in the final quarter of 2022, with 400 jobs being lost
Travis Perkins axed 400 jobs and closed nearly 20 branches at the end of last year as a slowdown in the construction sector hit its bottom line.
Britain’s biggest supplier of building materials, which owns the Toolstation chain, said it was forced to take some “difficult decisions” to slash costs by £25 million this year.
It shuttered 19 branches in its general merchant and Benchmarx divisions in the final quarter of 2022, with 400 jobs being lost due to the site closures and across central support functions.
This week the business posted a 20% drop in pre-tax profits to £245 million for 2022.
It also warned of a challenging 2023 as housebuilders slow down projects and home-owners delay improvements due to concerns about the economy and the jump in borrowing costs.
The news comes as Britain’s overall construction market is expected to shrink about 5% to 7% this year in volume terms.
Travis Perkins said this would hit its 2023 profit, which is currently forecast to fall by 6% from last year’s level.
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Adjusted operating profit fell 16% last year to £295 million, below its predicted £320, although sales remained resilient, driving revenues up 8.9%.
The miss was blamed on restructuring costs from closing 20 smaller branches out of the group’s 1,500, which finance boss Alan Williams said was part of Travis Perkin’s plan to prepare for a tougher year.
Although, Williams said the bright spot was in public sector projects such as hospital and school building and social housing sectors.
“We’re still seeing a lot of refit projects post the pandemic throughout the UK,” he said, adding that many offices were being updated to suit more flexible working patterns.
The business expects inflation for the building goods it sells to moderate to about 5-8% this year, compared to a rise of about 15% last year.
Williams said bricks had been one of the worst affected products, with their prices rising 50% over the last 18 months, while plasterboard had risen 30%.
Chief executive Nick Roberts said: “In the second half of the year we made some difficult decisions in response to the weaker trading environment and we continue to be watchful of market trends, working closely with our customers and suppliers to stay on the front foot.”
The group employed around 20,000 people in total and had about 1,500 branches before the latest cuts.
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