Travis Perkins reviews Toolstation operations as it plans for tough year ahead
Reuters
Published Mar 05, 2024 07:27
Updated Mar 05, 2024 10:36
By Yadarisa Shabong
(Reuters) -Shares in Travis Perkins (LON:TPK) reversed early losses to rise on Tuesday after Britain's biggest supplier of building materials said it was reviewing some of its consumer-facing Toolstation businesses in Europe.
The group said it was planning for another year of challenging demand after reporting a 39% drop in 2023 profit - in line with its own forecasts but slightly below a company-supplied consensus - due to a slowdown in new-build housing and renovations.
It said it was planning to potentially exit Toolstation France and reviewing strategic options for Toolstation Benelux. The business supplies tools and building supplies to trade and do-it-yourself customers.
Shares were up about 3% by 1025 GMT after sliding as much as 6% in early trade after it issued a weak profit forecast.
The reversal "is likely (due to) the market looking through the downgrades on 2024 and the positives of exiting Toolstation France," JPMorgan (NYSE:JPM) analysts wrote in a note.
A recovery in Britain's construction sector is unlikely to gain momentum before the conclusion of the general elections, the company said on Tuesday as it warned of weak 2024 profit.
The group's customers, which include some of Britain's biggest builders, are "inevitably waiting to see if there is a post-election government stimulus package for the sector" and clarity on interest rates, Travis Perkins said.
"We would encourage any government to really look fundamentally at reforming the planning system, which is a challenge," CEO Nick Roberts said in an interview with Reuters.
Roberts added that he would also encourage any government to look at net zero obligations. "We haven't made as much progress as we would like in the UK, and therefore encouraging government incentives would be very much at the forefront," he added.
"Things like installing a heat pump in your home as a retrofit solution is still very, very expensive and a barrier to most in the UK," new finance chief Duncan Cooper, who joined the group from homebuilder Crest Nicholson (LON:CRST) in January, added.
The company forecast 2024 adjusted operating profit in the range of 160 million pounds to 180 million pounds ($202.82 million to $228.17 million).
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Analysts estimate 2024 profit between 150 million pounds and 231 million pounds, according to a company-compiled consensus.
($1 = 0.7889 pounds)
Written By: Reuters
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