Travis Perkins: profit warning and £65m cost-cutting scheme

Travis Perkins has launched a £65m cost-cutting programme as it warned today that profits for this year will be at the low-end of analysts’ expectations.

Turnover has dropped dramatically during the last few weeks as sales were hit by the turmoil in the financial markets.

A trading statement today showed that group turnover for the nine months to the end of September was up 3.3% compared to the equivalent period in 2007.

But the statement added: “In recent weeks, trading has been below earlier expectations with both the merchanting and retailing businesses experiencing more difficult conditions as sentiment in construction markets has reacted to the extraordinary turmoil in financial markets.

“This, together with continuing negative trends in leading indicators, leads us now to expect a more rapid decline in market activity, although our view of the scale of the likely downturn has not materially changed.

“We now expect profits before tax and non-recurring charges for 2008 to be at the low end of analysts’ expectations.

“We will now implement, before the end of 2008, actions aimed at reducing costs by at least £65 million.”