Builders’ merchant and Wickes DIY chain owner Travis Perkins saw profits fall last year as it grappled with Brexit-fuelled inflation and diminishing consumer confidence.
The group reported pre-tax profits of £330.6m in 2017 before exceptionals, down over 9 per cent from £364.7m a year earlier.
Travis pointed to rising costs resulting from sterling’s collapse following Britain’s vote to quit the EU in 2016, as well as commodity inflation which it said is still working its way through the supply chain.
The company said: “This cost inflation dictated that a main focus for the year was how to pass this inflation through into sales prices, protecting profitability in the short term.
“On the whole, the group’s businesses have passed this inflation through successfully.”
Consumer confidence “declined steadily through 2017”, the firm added, while highlighting the fact that wage inflation is still lagging overall price rises, “reducing consumer discretionary spending power”.
Shares in Travis were down more than 7 per cent in morning trading at 1,330p following the announcement.
Nevertheless, revenue rose 3.5 per cent to £6.4bn, with like-for-like sales growing 3.3 per cent.
Chief executive John Carter said: “2017 was a challenging year for the group, with continuing uncertainty in our end-markets, and declining consumer confidence throughout the year.
“The main focus for our businesses has been to recover the significant cost price inflation encountered and on the whole, this has been achieved successfully.
“Despite the challenging environment, we have continued to make disciplined investments in our customer proposition for the long term.”
Travis undertook 27 Wickes store refits in the year, which it said is delivering a significant sales uplift compared with the old format stores.
However, the plan to open more Wickes stores has been slowed “given challenging UK DIY market conditions”, with just three additional stores opened in 2017.
Looking forward, Travis said the UK’s requirement for more homes and the structural underinvestment in the repair, maintenance and improvement of existing homes shows that the conditions for market growth remain “favourable”.
But the group added: “Macro-economic data has been difficult to read and recent lead indicators, including consumer confidence and housing transactions, have painted a mixed picture for the near-term performance of the group’s end markets which is expected to continue in 2018.”