Travis Perkins to close 30 branches and cut 600 jobs
Shares are down more than a fifth since EU referendum
Travis Perkins, the builders' merchant and consumer DIY chain, has announced it is closing 30 branches and cutting 600 jobs, citing "uncertain" trading next year.
The cuts will come in the trade divisions of the FTSE 100 company, which sell to builders and other contractors. The job losses and closures will affect the core Travis Perkins brand, as well as its kitchen and joinery business Benchmarx, and the firm's plumbing and heating subsidiaries BSS and PTS, says The Guardian.
It isn't all bad news, however. Bosses at Travis Perkins say the company's consumer DIY brands Wickes and Toolstation have put in a "very strong performance" and will not be affected.
Like-for-like sales for the group overall were up two per cent for the third quarter, while the latest results reveal profits for the year as a whole will be only "slightly" lower than previously expected.
There is less confidence in the coming year. Chief executive John Carter told the BBC it is "still too early to predict customer demand in 2017 with certainty" and that as a result Travis Perkins is seeking cost savings.
Charlie Campbell, an analyst at Liberum, the investment bank, says it's not clear whether the company's problems were "due to uncertainty around the EU referendum and its after-effects".
The fear is that the cuts at Travis Perkins are part of a wider slowdown in business investment that many economists predict will persist until the government finalises its new trading relationship with Europe.
Less investment would mean a slowdown in areas like construction and housing, which would hit Travis Perkins hard. Almost all of its near-£6bn annual revenues are earned in the UK, making the firm especially vulnerable to a post-referendum slump.
The company says staff will be redeployed across the group where possible. It has also announced that a more fundamental review of its plumbing and heating businesses will be completed next year.
Travis Perkins shares were leading the fallers on the FTSE 100 this afternoon, dropping six per cent to £13.97. They're now down more than a fifth since the Brexit vote at the end of June.