The newly appointed CEO of Travis Perkins has acknowledged that the builders’ merchant has become “distracted and overly focused on internal matters,” following the company’s second profit warning within a short span of three months.

In a trading update covering the three months leading to the end of September, Travis Perkins projected a full-year operating profit of £135 million, falling short of consensus estimates that predicted £153 million.

The announcement prompted a decline in share prices, with investors reacting negatively as shares dropped by 42p, marking a 4.6% decrease to close at 880p.

Pete Redfern, who took over the helm from Nick Roberts just last month, emphasized the necessity for the company to return to a focus on operational execution, indicating that it has strayed into an overly inward focus.

This shift in leadership comes after Jasmine Whitbread stepped down as chair due to shareholder dissent, with nearly a quarter opposing her re-election during the annual general meeting.

Nick Roberts had previously declared his exit mere weeks before Whitbread’s departure, following a significant decline in profitability during his five-year term.

Several other key executives have also exited the company this year, including Dean Pinner, who was the managing director for Keyline, the subsidiary specializing in construction materials for infrastructure projects.

Redfern remarked on the substantial changes within the organization, stating, “Our teams are fully capable of achieving excellent results even in challenging market conditions, and although they haven’t been provided the best opportunities to perform, we can improve that situation and implement specific measures to empower them for success.”

Year-on-year sales saw a reduction of 5.7%, with the merchanting sector experiencing an 8.2% decline in like-for-like revenue; the general merchant sector notably lost market share during the summer months.

The company acknowledged that both volume and margins in the general merchant division did not meet expectations, with volumes continuing to drop despite recent pricing optimizations. Redfern stated that Travis Perkins should outperform its merchanting counterparts, asserting, “We should be capable of outpacing the market instead of slightly falling behind it.”

Looking ahead, the company noted signs of stabilization in its key end markets and anticipated some early indicators of recovery. They projected a slow yet positive growth trajectory in these markets over the coming year.

“This quarter has been quite challenging,” Redfern commented. “The recent election improved market sentiment somewhat, but stakeholders remain cautious as they await the budget to understand the potential for infrastructure investments. Conditions have not worsened, but neither has there been a significant recovery.”

On a positive note, Toolstation, the company’s trade outlet, exhibited robust performance, with sales increasing by 2.9% in this division and a 2.1% uptick year-to-date, contrasting sharply with the 6.3% decline noted in the merchanting division.

Additionally, it was reported that Toolstation France is on course for complete closure by the end of the financial year, with eight branches sold to the French retailer Quincaillerie Angles, while the remaining 43 branches and the online platform have ceased operations.