StockMarketWire.com - Builders' merchant Travis Perkins swung to a first-half loss and scrapped its dividend following a slump in construction activity caused by the Covid-19 crisis.

Pre-tax losses for the six months through June amounted to £113m, compared to a profit of £12m on-year, as revenue dropped 20% to £2.78bn.

Travis Perkins booked one-off costs of £129m, primarily linked to a restructuring programme designed to deliver £120m of annualised cost savings.

The company had in June announced that it would cut about 2,500 jobs, or about 9% of its workforce, amid the planned closure of 165 branches.

It also reiterated that a demerger of its Wickes DIY business had been paused until markets become more stable and predictable.

'The long term fundamentals of the group's end markets remain robust, with ongoing demand for new housing and underinvestment in the repair, maintenance and improvement of the existing UK housing stock,' Travis Perkins said.

'However, significant uncertainty remains in the UK economy in the near term.'

'There has been a recent strong recovery in secondary housing transactions, but it is not yet clear whether this is a sustained trend or a release of pent up demand.'

'Furthermore, it is likely that an increase in unemployment will have a detrimental impact on consumer confidence, and hence the group remains cautious on the volume outlook for building materials in the near term.'

Travis Perkins said its like-for-like sales trends in July and August had returned to close to prior year levels.

'The group has demonstrated significant agility across all its activities in the first half of the year, taking actions to strengthen its core businesses and leaving it well placed to continue to outperform its markets and generate value for shareholders.'



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