Travis Perkins, the UK’s largest builder’s merchant, is closing 30 branches and putting 600 jobs at risk, despite a 5.8% growth in revenue to £3.1bn ($3.8bn) and a 10.2% rise in pre-tax profit to £184m ($226m) for the first six months of 2016.
The firm said it was acting to pre-empt "an uncertain UK outlook" in 2017, which is understood to be a reference to the possible effects of a "hard Brexit" on demand in the UK’s construction industry.
John Carter, the company’s chief executive, said in a statement: "It is clear that the result of the EU referendum has created significant uncertainty in the outlook for our end markets and we did experience weaker demand in the run up to and immediately following the referendum.
"Our two-year like-for-like sales in July have been below the levels we experienced in the second quarter, however we have seen a gradual improvement through the course of the month.
"In our view it is too early to precisely predict end market demand and we will continue to monitor the lead indicators we track and will react accordingly."
The company recorded a strong performance in its general merchant sales, but those in plumbing and heating were restricted to like-for-like sales growth of 0.4%. The company attributed this to "challenging trading conditions in the heating market, with continuing commodity price deflation".
The job losses and closures are in the companies PTS (Plumbing Trade Supplies) business, and BSS Pipeline and Heating solutions, Benchmarx (kitchen and joinery) and its Travis Perkins general trade supplies outlets. Its Wickes and Toolstation branches, which are aimed at general consumers, are not affected.
Travis Perkins, which employs 28,000 people and has 2,060 stores, is engaged in a five-year programme intended to match its stores with market demand by closing unprofitable and investing in profitable outlets.
Travis Perkins has been one of the principal victims of Brexit jitters. Its share price fell on the FTSE 100 following the Brexit vote and are down more than 22% since the referendum.
Consulting engineer Arup last month warned staff that it would be looking to cut around 90 posts as a result of a slowdown in new orders following the UK’s 23 June vote to leave the EU.
Image: A Travis Perkins truck unloading in London (Creative Commons)
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Arup are just reacting to the general market it has nothing to do with Brexit; it’s just an excuse to have a go at the government. They made 400 redundant in 2009 and Brexit wasn’t around then, just movements in the global market. Sir Ove Arup will be turning in his grave at the company which is now owned by Trusts!