Cooling DIY sales in Britain knock retailer Travis Perkins

Demand for do-it-yourself products has cooled off in the UK and has hit the profits of building suppliers.

Travis Perkins has said its Toolstation business swung to a loss in the first half of the year, as demand for do-it-yourself products cooled off, sending the building materials seller's shares down 11%.

The London-listed firm said its revenue from Toolstation was 4.6% lower, while adjusted operating loss stood at £8m (€9.6m) in the six months to June 30, compared with a £10m profit last year.

JP Morgan analysts attributed the softer performance to a normalisation of the customer base after the Covid-19 pandemic spurred demand for home renovations and lifted DIY sales.

Meanwhile, the company said inflationary pressures, which were driven by supply chain issues last year, now largely stem from rising energy costs that have been passed on from manufacturers.

Travis Perkins expects to deliver full-year results in-line with market estimates.

Overall, revenue rose 10.3% to £2.54bn in the first-half, powered by its merchanting business which involves the sale of wood, sand and all types of building materials.

However, adjusted operating profit of £163m was slightly lower than £164m a year ago.

"On first glance, Travis Perkins's top and bottom-line performances appear to be relatively resilient," said Victoria Scholar, head of investment at Interactive Investor said.

"However, on closer inspection, the home improvement company has been struggling with reduced demand for DIY products after Covid-19," she said.

Shares of the company, down almost 39% so far this year, fell to a two-year low to vale the company at around £2bn. Reuters