Travis Perkins profits hit as housebuilding suffers worst slump since financial crisis
Travis Perkins has seen its profits drop due to a slump in the housebuilding sector which has resulted in a subdued trading environment since the start of the year.The building materials supplier said lower activity had taken its toll as developers contend with higher interest rates and cost-of-living pressures.Last year, Travis Perkins warned of the challenging conditions and said activity would depend on a rebound in consumer confidence and additional interest rate reductions.However, construction is suffering its worst slump since the financial crisis despite Labour's pledge to build millions more homes.Travis Perkin's full-year results published today show adjusted operating profit fell 12.5 per cent to £133million in 2025, as revenue slipped 0.9 per cent to £4.6billion. Travis Perkins is suffering from the continued slump in the construction industryIts merchanting division, which supplies materials to builders, suffered from lower trading volumes and heavy promotional activity, which weighed on revenue and wiped £32million from gross profit. It highlighted that construction activity in London and the south east remained particularly weak.Chief executive Gavin Slark, who joined in January, said Travis Perkins had made 'significant operational progress over the past year' but trading had been affected by 'operational challenges' including the rollout of a new IT system.There were some signs of improvement for Travis Perkins, however.Travis Perkins said it had kept overheads in line with the previous year despite higher costs and increased employer National Insurance contributions, which it said had been 'broadly mitigated by proactive cost management'.The Northampton-based firm said its tool retailer Toolstation UK had been a standout performer in 2025, with adjusted operating profit increasing by £10million (29.4 per cent) driven by sales growth.It also said the group had strengthened its balance sheet, reducing net debt by £224million in 2025, which will reassure investors.Adam Vetesse, market analyst for investing platform Etoro said the results show the supplier is 'stabilising' but 'this is not a growth story yet, but a company that has stopped getting worse.''There are some early signs of improvement, particularly in core merchanting volumes and continued strength in Toolstation, but these are modest and heavily reliant on a broader recovery in UK construction and housing activity. With interest rates still elevated, demand visibility remains limited.'Investors were likely hoping for clearer evidence of margin recovery or upgraded guidance, neither of which has materialised. As a result, the shares have come under pressure.'Travis Perkins shares are up 6.7 per cent to 6.23p.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Travis Perkins profits hit as housebuilding suffers worst slump since financial crisis
