Shares in construction company Travis Perkins (LON:TPK) plunged on Wednesday after warning profits for the year would be lower than expected.
The company announced plans to close around 30 stores, potentially causing the loss of around 600 jobs. The company cited a challenging post Brexit economy as the main reason behind weak sales in both their plumbing and heating divisions, as well as a decrease in demand between the August and September months.
As a result, Travis Perkins will be closing 10 of its distribution and fabrication centers, as well as a further 30 branches. This is expected to affect branches of Travis Perkins, Benchmarx, BSS and PTS, but not its affiliated DIY store of Wickes branches.
The 600 individuals whose jobs are at risk as a result of these saving provisions have reportedly already been notified of the developments.
Chief Executive, John Carter, remarked:
“It is still too early to predict customer demand in 2017 with certainty and we will continue to monitor our lead indicators closely. Given this uncertainty we will be closing over 30 branches and making further efficiency driven changes in the supply chain, resulting in an exceptional charge of £40-50 million this year.”
These latest figures raise further market concerns over the effect of Brexit uncertainty on the construction sector, as well as job security in the UK for businesses in general. Following the announcement, Travis Perkins shares dropped by 5.5 percent in early trading, marking the biggest fall in the FTSE 100. Since the June referendum, Travis Perkins shares have fallen by around 22 percent.
An analyst for Liberum Charlie Campbell told the BBC that it was unclear as to whether the company’s current difficulties were “due to uncertainty around the EU referendum and its after-effects or a sign of more fundamental weakness”.
The company is Britain’s largest building supplier and currently employs 28,000 people in the UK.