(Alliance News) - Travis Perkins PLC on Tuesday said 2023 was marked by "weak market conditions" as revenue and profit decreased, and it declared a considerably reduced full-year dividend.
The Northampton, England-based builders' merchant said its pretax profit for 2023 was GBP70.0 million, down 71% from GBP245.0 million the prior year. Basic earnings per share plummeted 80% to 18.1 pence from 90.8p.
Revenue decreased 2.7% to GBP4.86 billion from GBP4.99 billion, which Travis Perkins attributed to a "progressive downturn in new build housing and private domestic [repair, maintenance and improvements] markets".
Adjusted operating profit fell 39% to GBP180.4 million from GBP295.3 million thanks to a mix of "lower volumes, overhead cost inflation and rapid commodity price deflation" in the second half.
Travis Perkins recommended a 5.5p per share final dividend, down 79% from 26.5p. The total dividend for the year is therefore 18.0p per share, down 54% from 39.0p.
The company is now "planning for another year of weak demand", as any UK construction sector recovery is unlikely to gather any momentum before the UK general election is concluded". It said its customers will most likely wait for further clarity on interest rates, and "inevitably" hold out for a potential post-election government stimulus package.
Additionally, Travis Perkins said the second half's "weak trading environment" has so far continued into 2024. Because of this, it expects a further decline in adjusted operating profit to between GBP160 million and GBP180 million.
"While the timing of recovery in our end markets is uncertain, the long-term growth drivers of our industry remain robust," commented Chief Executive Officer Nick Robertson. "The proactive steps we are taking to rebuild profitability and strengthen our balance sheet will create a more resilient business and, together with our strong customer relationships and differentiated offer, will see the group well positioned to emerge stronger when markets recover."
Shares in Travis Perkins were down 0.4% at 742.20 pence in London on Tuesday afternoon.
By Emma Curzon, Alliance News reporter
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Travis Perkins (TPK)