Travis Perkins Sees Profits Drop 25% as Construction Sector Stalls

Supplier’s figures offer a reality check for housebuilders, developers, and landlords alike.

A Snapshot of a Slower Sector

Travis Perkins, one of the UK’s largest suppliers of building materials and a key player in the construction supply chain, has posted a 25% fall in profits for the 2024 financial year. Their adjusted operating profit came in at £152 million, down from £204 million the year before.

While this figure slightly beat market forecasts, the underlying message is clear: housebuilding and home improvement are facing real headwinds, and the industry is not yet in recovery mode.

For developers, consultants, and property investors, Travis Perkins’ results offer more than a corporate update. They provide a lens into what’s really happening on the ground — and what lies ahead in 2025.

What's Driving the Decline?

The headline figure — a 25% drop in operating profit — reflects broader economic conditions that are weighing heavily on construction demand.

A few key factors are at play:

• Higher interest rates: The Bank of England’s sustained rate hikes over the past 18 months have pushed up mortgage costs and eroded affordability. As a result, housing transactions have slowed, and developers have scaled back projects.
• Cautious consumer sentiment: Homeowners are holding off on major renovations and home improvement plans, waiting for more economic certainty. That pause is directly affecting materials demand, especially for big-ticket items.
• Project delays and deferrals: Some developers have paused or slowed construction timelines to manage cash flow and wait for improved market conditions. With fewer starts and stretched delivery dates, suppliers like Travis Perkins are seeing volume reductions.

The company’s core merchanting division, which makes up over 80% of revenue, was hit hardest. A 7% drop in volumes speaks to the current softness in demand across the board — from large housebuilders down to independent tradespeople.

A Broader Warning for the Market

These results go beyond one company’s performance. They echo a broader reality: the construction and property sectors are navigating through a tough transition period.

Developers will want to take note. While material inflation has slowed compared to the highs of 2022, total costs remain elevated. Fewer discounts and reduced competition among suppliers means margins remain tight for those trying to deliver schemes at scale.

Landlords undertaking refurbishments or upgrades should also pay attention. With trades and materials still under pressure, costs may not fall as quickly as expected. Budgeting for higher-than-usual quotes on repairs or energy-efficiency upgrades (especially ahead of future EPC requirements) remains sensible.

For consultants, particularly those advising on viability assessments or lender risk profiles, Travis Perkins’ numbers serve as a reminder to temper expectations. Project timelines may need longer buffers, and market assumptions may need rebalancing, especially when it comes to delivery speeds.

What Comes Next? Modest Recovery — but No Spike

Looking ahead, Travis Perkins has forecast another modest step down in profit for 2025, estimating adjusted operating profit around £141 million (excluding property disposals). That points to continued caution.

However, there are a few reasons to believe the worst may be behind us:

• Inflation is stabilising, with headline rates coming down and the Bank of England expected to begin rate cuts in the second half of 2025. That could unlock more buyer activity and developer confidence.
• Government housing incentives and planning reform are starting to take shape, with a push to increase annual completions. If funding and permissions align, this could create pockets of new demand for materials and labour.
• Medium-term infrastructure spending remains on the table, especially in regional cities. Investment in transport and public housing may drive commercial activity even if the private market remains slow.

Still, no one is predicting a sharp rebound. Growth in demand is likely to be gradual, uneven, and highly regionalised. That means professionals across the sector need to plan for resilience, not acceleration.

How Property Professionals Should Respond

For investors and developers, there are several actionable takeaways:

• Manage supplier relationships carefully. In a soft market, some contractors and merchants may be more flexible on payment terms or delivery options. Use this to your advantage when scoping works or planning phase rollouts.
• Factor in longer timelines and contingencies. Supply chain delays aren’t as acute as during the pandemic, but capacity gaps and reduced inventories can still impact programme timings. Bake in flexibility.
• Revisit viability models. Build and refurb costs may not drop substantially for another 6–12 months. If you’re underwriting deals based on historic costs or projected cost falls, reassess before committing.
• Watch regional signals. Activity is likely to return first in cities where housing demand remains strong — Manchester, Birmingham, Bristol, and outer London boroughs, for example. Track planning applications and tender pipelines for early signs of movement.
• For consultants: Use these data points in funding submissions or project reports. Lenders and JV partners are increasingly risk-aware and will appreciate grounded, market-informed assumptions.

Final Thought

Travis Perkins’ 2024 performance might not grab headlines, but for those in the property world, it’s an important signal. Construction demand is still soft, and recovery — if it comes — will be gradual, not explosive.

Staying nimble, planning with precision, and keeping a close eye on costs are essential. The era of "build at all costs" is over, at least for now. Instead, smart operators will focus on lean delivery, strong partnerships, and the kind of financial discipline that turns a tough year into a long-term opportunity.