Travis Perkins plummets as City takes fright on profit warning

Travis Perkins, Britain’s biggest builders’ merchant, shocked the City as it shut 30 branches, put 600 jobs at risk and warned on profits.

The company, often seen as a bell-wether for the wider economy, sank to the bottom of the Footsie as its shares plunged 7% to 1382p.

The closures relate to its trade businesses and will cost the company between £40 million and £50 million this year. Retail operations, including Wickes, will not be affected.

Full-year earnings are now expected to be below forecasts at £415 million. Like rivals, Travis has faced weakness in plumbing and heating, which accounts for just under 10% of the group’s earnings.

Competitor Wolseley axed 800 jobs last month.

Boss John Carter said a cocktail of factors, including falling prices of materials such as copper and steel, overcapacity and the absence of stimuli such as government subsidies for new boilers and social housing schemes, have hit demand.

Though not directly responsible, Brexit had heightened uncertainty for next year and beyond, he added.

Overall, Travis’s sales rose 3.4% in its third quarter. Broker Liberum said market dynamics such as improving remortgaging activity should provide support, but only “time will tell”.