Travis Perkins Shares Dip as H1 Profits Decline Amidst Sluggish Construction Market

The Travis Perkins (LON:TPK) share price edged lower following the release of its first-half 2025 results on Tuesday, which revealed a significant drop in adjusted operating profit.

The building materials supplier is grappling with headwinds in the UK construction sector, impacting its overall financial performance.

The stock is currently trading around 531p, down 0.75% on the day following the earnings release. For the year-to-date, TPK shares are down over 26%.

Travis Perkins reported a 24.1% decrease in adjusted operating profit, falling to £63 million for the first six months of 2025, compared to £83 million in the same period last year.

Group revenue declined 2.1% to £2.3 billion, driven primarily by subdued activity in the Merchanting segment, while adjusted earnings per share dropped 33.2% to 13.3p.

However, there are signs of stabilization. Actions taken to boost volume in the Merchanting segment appear to be gaining traction, with like-for-like sales declining by 1.0% in Q2, an improvement from the 3.2% decline in Q1.

Toolstation UK emerged as a bright spot, with operating profit rising 50% to £21 million and continued market share gains. The group has also strengthened its balance sheet, reducing net debt before leases by £88 million to £103 million, helped by strong working capital inflows and the sale of Staircraft.

The Board has recommended an interim dividend of 4.5 pence per share, aligned with the Group's policy to distribute 30-40% of adjusted earnings. This is down from 5.5 pence per share in 2024.

Looking ahead, a key development is the appointment of Gavin Slark as Chief Executive Officer, effective January 1, 2026.

While the company said it continues to make progress on actions to stabilise performance, it added that end market demand remains subdued and the timing of a recovery in the UK construction sector is uncertain.

“Given this demand backdrop, the Group expects to deliver a full year adjusted operating profit (including £8m of property profits) broadly in line with current market expectations,” said Travis Perkins.