Travis Perkins warns on profit from the UK housing market hit. The largest supplier of building supplies in Britain, Travis Perkins (TPK.L), revised its annual profit projection downward by as much as 27% on Wednesday, attributing the revision to the market’s persistently challenging circumstances for new construction and rehabilitation.
The company reported that it had previously guided to an adjusted operating profit of 240 million pounds in 2023, a 12% decrease from its current expectation of 175 million to 195 million pounds.
“Market conditions remain challenging with continued weakness across new build housing and domestic repair, maintenance, and improvements,” Chief Executive Nick Roberts said.
After an increase in interest rates, the housing market in Britain has slowed this year, preventing housebuilding and the real estate transactions that frequently lead to repair and upgrade work. Additionally, a lack of discretionary cash prevents people from investing in their homes.
Travis Perkins said there was “a notable deterioration in market activity and sentiment” in September, and deflation in commodity prices would hurt its bottom line. As a result, it had to sell its current stocks at lower market prices to remain competitive.
The group said that because Britain needed new houses and many current structures would need to be decarbonized, it was still optimistic about the long-term prognosis.
In the previous six months, the value of Travis Perkins’ stock, which also owns Toolstation, has decreased by 13%.
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