Travis Perkins warns on profits as it closes stores, cuts jobs

TRAVIS PERKINS is to close 30 branches and could cut as many as 600 jobs, the builders’ merchant said, as it posted a slight rise in third quarter group sales, but warned on full year profits.

The group, which owns Wickes, also said it would close ten smaller distribution and fabrication centres and write off some IT systems. The restructuring will cost the group as much as £50m, the builders’ merchant said in a statement on Wednesday.

But boss John Carter said the cash cost of restructuring – around two-thirds of the total cost – is expected to be recovered by the cuts made over the next 18 months.

Performance in the group’s plumbing and heating division weighed on the business with “disappointing” results. Carter said the business will review the division and report back next year.

“Our operational focus remains on improving all of our customer propositions, optimising our networks, intensifying our use of space and exploiting the scale advantage we have created. We expect this focus to underpin our outturn for 2016, albeit with adjusted EBITA slightly below current market consensus of around £415m,” Carter said.

Group sales rose by 3.4% during the third quarter and by 2.0% on a like-for-like basis. Plumbing and heating sales fell by 3.9% in the third quarter.

Travis Perkins’ CFO Tony Buffin was promoted to COO last month, after two years in the role. His finance role has been taken on by Greencore finance chief Alan Williams (pictured), who was interviewed by Financial Director in 2012.