Travis Perkins sees operating profit plummet by 99% amid construction downturn

Travis Perkins, the Nottinghamshire-based firm, has reported a staggering 99 per cent drop in operating profit in 2024.

The FTSE 250 building group's operating profit plummeted to £2m, down from £161m in 2023, following a 4.7 per cent decline in revenue, as reported by City AM.

The company's shares dropped by 10.4 per cent in early trading on Tuesday morning. These figures include £139m in asset impairments.

The disappointing results were attributed to "lower trading volumes and price deflation," despite the company's "significantly improved cost discipline."

However, the firm did highlight the strong performance of its Toolstation business, which saw a 48 per cent increase in adjusted operating profit.

In 2024, Travis Perkins closed down Toolstation France as part of a wider effort to cut costs and refocus on core business lines.

Geoff Drabble, the chair of Travis Perkins who is currently acting in place of a formal chief executive, stated that the poor results indicate "there are a number of areas where the business needs to refocus and change the way it operates."

In March, former chief Pete Redfern stepped down immediately due to ill health after only six months in the role. Redfern, who was appointed in September 2024, had previously been a non-executive at the firm, following a 14-year tenure as Taylor Wimpey's boss.

Analysts at Peel Hunt had predicted at the time that the new leadership could have been "a catalyst" for revenue growth.

Drabble commented: "Whilst uncertainty remains regarding the strength and timing of a recovery in UK construction activity, with more resources re-deployed into customer-facing roles, the Group is now better placed to benefit from returning demand."