Investing.com — posted a full-year loss after tax of £176 million for 2025, against a loss of £77 million a year earlier, marking the third consecutive year of material exceptional charges after taking £222 million in largely non-cash write-downs across its Merchanting and Toolstation businesses.
The London-listed group’s operating loss widened to £97 million from a profit of £2 million in 2024. Adjusted operating profit, which strips out the charges, fell to £133 million from £152 million, beating RBC Capital Markets’ estimate of £128 million and market consensus of £132 million.
Of the £222 million exceptional, only £8 million were cash items, comprising £111 million in Merchanting impairments across 196 branches including a £44 million goodwill write-down at CCF, £99 million in Toolstation Benelux asset write-downs and £12 million in restructuring costs.
Free cash flow of £206 million beat RBC’s forecast of £139 million by 47%, driven by a £136 million working capital inflow from the normalisation of supplier payments following a troubled migration to Oracle software in the prior year.
Net debt before leases fell to net cash of £1 million from net debt of £191 million, the group’s first such position in nearly 30 years.
Group revenue fell 0.9% to £4.57 billion, while like-for-like revenue grew 0.3% against a decline of 5.3% a year earlier, accelerating to plus 2% in the fourth quarter.
Merchanting adjusted operating profit fell 18% to £122 million, with margin narrowing to 3.3% from 3.9%, as construction activity in London and the southeast remained weak. Toolstation UK adjusted operating profit rose 29% to £44 million.
RBC Capital Markets, which acts as broker to Travis Perkins, kept its price target at 850 pence and “outperform” rating against a share price of 583.5 pence, but cut its 2026 adjusted earnings per share forecast by 12.6% and its 2027 forecast by 7.9%, citing higher interest costs and a higher tax rate.
“We continue to see significant upside potential from self-help and market recovery at some point,” analyst Andrew Brooke wrote.
Chief executive Gavin Slark, who joined January 1, said the balance sheet “now provides the necessary resilience and flexibility to underpin our competitiveness in what remains a challenging backdrop for UK construction activity.”
The board recommended a full-year dividend of 12 pence, down from 14.5 pence, within its 30%-40% payout policy. The group said trading since the start of 2026 “has remained subdued.”