Travis Perkins slashes revenue outlook as rates of interest hit housing market
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weak housing market has hit instrument lender Travis Perkins, forcing it to chop again revenue expectations to ranges that not even its most pessimistic analysts had foreseen.
The enterprise stated that its efficiency within the first quarter of the yr had been resilient, however the bounce-back it was anticipating in a tricky market didn’t materialise within the second.
“The group delivered a resilient performance in the first quarter but has not seen the anticipated easing of market conditions in the second quarter to date,” it stated in an replace to shareholders on Friday.
This signifies that bosses now count on that adjusted working revenue will attain round £240 million this monetary yr, as a substitute of the £272 million that they had guided again in April.
It is lower than even the bottom estimate by analysts, who thought that adjusted working revenue would attain £254 million. The most optimistic analysts had forecast Travis Perkins’ revenue at £281 million.
The firm is dealing with a tricky time in a market rocked by inflation and spikes in rates of interest that are placing a chill on the housing market.
Travis Perkins rents instruments and different constructing gadgets to builders and building firms throughout the UK.
The enterprise stated that the £29 billion restore, upkeep and enchancment (RMI) market had additionally been hit.
“Volumes in both the new build housing and private domestic RMI markets continue to be impacted by higher interest rates and weaker consumer confidence driven by persistent, higher than anticipated consumer price inflation,” it advised shareholders in a brief replace on Friday.
“Assuming that the present conditions persist for the balance of the year, management now expects to deliver a full year adjusted operating profit of around £240 million.”