Construction supplier Travis Perkins says demand weakened after the Brexit vote – and says housing transactions are “unlikely to be positive” after the Brexit vote
Builder's merchant Travis Perkins share price was hit this morning after the company said sales growth in July was knocked by the Brexit vote.
The construction materials supplier's share price fell by 2.72 per cent in morning trading, despite announcing in its interims that like-for-like sales were up by 3.1 per cent in the six months to the end of June, and operating profits were up by five per cent.
Read more: Home ownership in England has hit a 30-year low
Chief executive John Carter said there was less demand for the company's services in the period leading up to the Brexit vote.
[stockChart code="TPK" date="2016-08-02 09:12"]
He said: "Our two-year like-for-like sales growth in July was below the levels we experienced in the second quarter, however we saw a gradual improvement through the course of the month."
The company said it had adopted a "cautious stance" because secondary housing transactions and consumer confidence were "unlikely to be positive" in the coming months.
Read more: Mapped: First-time buyer house prices in every London borough
The group's consumer arm – most well-known for the DIY store Wickes – did particularly well, clocking up 6.5 per cent like-for-like sales growth in the first half.
Carter added: "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."
The news comes as research released today showed the scale of the UK's housing crisis; Resolution Foundation reported that home ownership has falled to the lowest levels in 30 years. If you're worried about the housing market after the Brexit vote, here's everything you need to know.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The company’s fortunes are closely attuned 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 onto suppliers."