Suppliers warn of cost uncertainties despite boost in sales

Suppliers have warned of cost uncertainties despite posting strong financial results.

Builders’ merchant Travis Perkins is among those that have pointed to an uncertain future in the wake of encouraging results from the firm’s first three months of trading in 2022.

The company said that the volatile supply of materials had settled by the end of last year, but added that new challenges such as the war in Ukraine and subsequent ripples through global supply chains could “challenge that relative stability”.

Travis Perkins has 700 outlets across its group, which encompasses Toolstation.

Commenting on the latest results, it said the increased price of materials accounted for two-thirds of the growth in revenue from its merchanting segment, which increased by 17.9 per cent. In the equivalent three-month period in 2021, the business reported that sales were down 13.6 per cent.

A spokesperson said: “Customer demand remains robust across our end markets with larger customer activity underpinned by the backlog of social and economic infrastructure work and ongoing requirement for new housing.

“SME [small and medium-sized enterprise] customers continue to see healthy order books, including a growing interest in energy-efficiency projects.”

Travis Perkins’ upbeat results came as construction-equipment hire firm HSS also posted strong full-year results for the year to 1 January 2022.

Revenue at HSS grew by 21.3 per cent – up from £250.1m in 2020 to £303.3m in 2021. The firm also rebounded into profit after suffering a £29.6m loss in 2020. The latest profit before tax stood at £6.1m.

HSS stated that the coming 12 months would see it focus on enhancing its digital capabilities.

Meanwhile, insulation, roofing and commercial interiors supplier SIG Group also reported “significantly higher” earnings expectations, posting UK sales growth of 23 per cent for the first quarter across both its interiors and exteriors divisions.

The trading update also showed that sales growth in Ireland rose by a whopping 78 per cent. SIG said that underlying operating margin was expected to reach 3 per cent of revenue.

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