Travis Perkins mulling French exit as 2023 profits sink

(Sharecast News) - Building merchant Travis Perkins said it is looking at exiting its French operations after seeing group operating profits more than halved in 2023.

The company, which runs 51 Toolstation stores in France - compared with 570 in the UK and 119 in the Benelux region - said it was working on a plan for a potential exit of Toolstation France, and undertaking a "strategic review of options" for Toolstation Benelux.

Operating profits totalled £110m in 2023, down 61.4% from the previous year, on the back of a weaker top-line performance and £60m of adjusted items related to impairments in Toolstation France and the kitchen and joinery division Benchmarx, along with the costs of restructuring actions. Adjusted operating profits slumped 39% last year to £180m.

Group revenues were 2.7% lower year-on-year at £4.86bn, which the company blamed on rising interest rates which held back new build housing activity. Meanwhile, a lack of secondary housing transactions and weak consumer confidence also affected perforfmance.

"Ongoing economic challenges have significantly impacted our trading performance, driven by weakness in the new build housing and domestic RMI sectors, and compounded by deflationary pressures on commodity products," said chief executive Nick Roberts.

"With market conditions expected to remain a headwind through 2024, the business is fully focused on improving profitability and enhancing cash generation."