Travis Perkins, the UK’s largest building materials distributor, reported a drop in full-year profits as tough trading conditions continued to weigh on its core merchanting business, though a much-improved balance sheet and strong progress at Toolstation provided some bright spots.
But investors will ultimately look at the wider economy and weak trading conditions and wonder whether shares at six-month lows have further downside potential.
Adjusted operating profit fell 12.5% to £133m for the year to December 2025, down from £152m, as lower volumes and increased promotional activity squeezed margins in the merchanting division.
On a statutory basis, the group swung to an operating loss of £97m after booking £222m of adjusting items, largely tied to impairments at Toolstation Benelux and restructuring costs.
Toolstation UK was the best-performing area, lifting adjusted operating profit by 29% to £44m as it continued to gain market share and its store estate matured.
The full-year dividend was cut to 12.0p per share from 14.5p, in line with the group’s payout policy of 30-40% of adjusted earnings.
Gavin Slark, the former SIG and Grafton Group chief executive, took the reins as CEO on 1 January 2026 and has already flattened the management structure so that all divisional heads report directly to him.
“It is the strength of our balance sheet that now provides the necessary resilience and flexibility to underpin our competitiveness in what remains a challenging market backdrop for UK construction activity,” Gavin Slark said.
“We will maintain our disciplined and selective approach to capital allocation as we navigate our way back to better market conditions.”
Trading since the start of 2026 has remained ‘subdued’, reflecting weak UK construction activity through the final quarter of last year. The group said it would focus on improving its customer offer and driving further efficiencies while it waits for the market to turn.
Travis Perkins shares were flat at the time of writing.