Builders’ merchant Travis Perkins cuts profits forecasts as housebuilding slowdown continues to bite
BUILDERS’ merchant Travis Perkins has cut its profits forecasts as the housebuilding slowdown continues to bite.
It said they would be £65million lower than expected because of “continued weakness” in the sector.
The company had initially told investors to expect profits of around £240million this year but has now confessed they will be much lower — at between £175million and £195million.
It is the latest blow to British business that can be traced back to the Bank of England’s 14 interest rate rises in a row which made higher mortgage costs unaffordable for many home buyers.
It dampened demand for new homes and caused the likes of Bellway and Taylor Wimpey to scale back their housebuilding plans. The number of homes being built is at its lowest in 14 years, despite growing need for housing.
Travis Perkins shares fell 49.6p, or 6.16 per cent, to 756p. Its warning also knocked shares in rival Screwfix owner Kingfisher.
Brickmaker Forterra also issued a profit warning yesterday and said it would scale back production due to sliding demand. The number of bricks sold in the last three months was 28 per cent lower than last year.
Travis Perkins, meanwhile, said it will cut prices by around 3 per cent and make even bigger reductions to stimulate demand.
Boss Nick Roberts said: “Deflation on commodity products has also been greater than anticipated.”
He told analysts that the price of timber had fallen by a quarter from a year ago.
Fat Face is Next deal
NEXT is looking to grow its collection of smaller high street brands by snapping up Fat Face for £100million.
Fat Face, which was taken over by its lenders three years ago, has 180 shops across the UK and alrready sells its clothes via Next’s website.
A deal could be announced later this week, Sky News reported.
Next has taken control of Reiss, Made.com, Joules, and has stakes in JoJo Maman Bebe, Victoria’s Secret and Cath Kidston.
Next has been ramping up its collaborations with third-party brands.
It has been widely credited with getting a headstart in online shopping by running a catalogue business in its early days.
Last month the retailer revealed that its online sales of other brands almost equalled the online revenues from its own Next label.
Market for jobs cooling
WORKERS are turning down new job offers to stay put in their current roles, recruiter Page Group has reported.
The labour market has been red-hot since the pandemic and firms have had to increase wages to fill vacancies.
But Page yesterday suggested that demand was cooling. It warned that its profits would be lower than forecast.
Salaries are still higher than before the pandemic, it said, but pay rises on offer are lower than last year and firms are taking longer to hire.
Nicholas Kirk, the chief executive, said: “These lower offers have led to a further increase in the number of offers rejected by candidates.”
Sluggishness in the job market led Page to post a 7.9 per cent slip in third-quarter net fees on a constant currency basis. In the UK the slip was even bigger, with fees sliding by 19 per cent. Shares fell by 13.8p to 410.2p yesterday.
Recruiter rivals Hays and Robert Walters were hit too.
ITV ads go personal on live BB
TV viewers could see different ads to their next door neighbour after ITV said it would roll out personalised advertising on live broadcasts.
Commercials screened around Big Brother and Love Island will be targeted to viewers based on ITV’s registered-user database.
So-called “addressable ads” will appear on ITV2, ITV3, ITV4 and ITVBe to 1.3million homes with YouView-powered set-top boxes.
Addressable ads have been in the works for broadcasters for six years but until now the focus was on streaming services.
ITV boss Dame Carolyn McCall warned last month that the ads spending slump has been the worst since the 2008 financial crisis.
Sun pull for pubs
A WET summer hit pub chain Marston’s in July and August but recent sales are still a tenth higher than last year.
The group, which also owns Pitcher & Piano, said pub sales were up by 11.3 per cent over the past six months as the after-work pint returned.
The warm autumn and Rugby World Cup have also helped.
The business said it was saving £5million by cutting head office jobs, which means profits will beat City estimates.
Buried treasure
THE Serious Fraud Office has launched a criminal investigation into the collapse of pre-paid funeral care provider Safe Hands Plan.
Around 46,000 people who paid into its scheme are owed £70million. Administrators said customers are likely to get back only £10million after it found around £30million of customer cash was transferred to Cayman Islands accounts.
The SFO is currently in court fighting a case against the ex-finance chief of Patisserie Valerie, which went bust with the loss of 900 jobs.
ASDA is spending £9million lowering the price of 200 groceries from apples to oven chips — to add to the £44million it has spent cutting prices since the summer. M&S will also cut prices on 200 items such as mince and fish.
£48bn shale sale
US oil giant Exxon Mobil has struck a £48billion takeover to become the world’s biggest shale producer.
The deal to buy Pioneer is the biggest acquisition since Exxon’s 1999 merger with Mobil, and the world’s biggest this year. It will make the company dominant in the oil basin between Texas and New Mexico and boost its production when other energy firms are pushing into renewables.
Boss Darren Woods said the deal was driven in the belief that fossil fuels will “continue to play a role over time”.
SHARES
BARCLAYS up 0.40 to 157.18
BP down 4.80 to 520.30
CENTRICA down 0.35 to 156.30
HSBC up 1.20 to 659.00
LLOYDS down 0.10 to 43.28
MARKS & SPENCER down 4.40 to 221.00
NATWEST up 0.70 to 229.20
ROYAL MAIL up 10.60 to 262.40
SAINSBURY’S up 0.90 to 258.10
SHELL down 17.00 to 2,640.00
TESCO up 0.70 to 281.10