Builders' merchant Travis Perkins hit by Brexit 'uncertainty'
Travis Perkins has said it suffered from weaker demand as a result of the EU referendum, but cautioned that it is too early to say what the full impact will be.
Chief executive John Carter said the vote to quit to the EU has created "significant uncertainty", with the builders' merchant seeing like-for-like sales slow in the second quarter "owing to a number of factors, including the deferral of projects ahead of the EU referendum".
He added: "It is clear that the result of the EU referendum has created significant uncertainty in the outlook for our end markets and we did experience weaker demand in the run-up to and immediately following the referendum.
"In our view it is too early to precisely predict end-market demand and we will continue to monitor the lead indicators we track and will react accordingly," he said.
The builders' merchant also reported results for the first half of the year, which saw sales rise 5.8% to £3.1 billion and pre-tax profits rise 10.7% to £176 million.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: " The company's fortunes are closely attuned to the housing market, as home purchases are often followed up by improvement works. Whilst there are doubts hovering over the UK economy, stocks like Travis Perkins could be in for a rough time.
"The company also sources products from over 50 countries, so the devaluation of sterling after Brexit could squeeze margins, unless Travis can push the pain back on to suppliers. Brexit is casting a long shadow over housing and construction stocks like Travis Perkins."