BUSINESS LIVE: Marston’s boosted by job cuts; Travis Perkins slashes profit forecast; FirstGroup lifts expectations

PageGroup has cautioned that full-year profits are unlikely to meet analyst expectations after the recruiter suffered falling fees amid a slugging job market.

The FTSE 250 firm forecast profits for the year to 31 December of £125million to £130million, below market expectations of £137.6million.

CEO Nicholas Kirk said: ‘Looking ahead, due to a slower end to the quarter, there is a heightened degree of uncertainty in the short term.

However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions.

‘Given these fundamental strengths, we believe we will continue to perform well in these challenging markets, and we are confident in our ability to implement our new strategy driving the long-term profitability of the Group.

‘We are also seeing the benefits from our investments in innovation and technology, where Customer Connect is supporting productivity and enhancing customer experience, and Page Insights is providing real time data to inform business decisions.’

FirstGroup has lifted its forecast for fiscal 2024 profits on the back of strong passenger numbers and increased leisure travel during the summer period.

The company, which operates Avanti West Coast, Great Western Railway, South Western Railway, expects fiscal 2024 adjusted operating profit to be ahead of its earlier forecast by about £14million.

Graham Sutherland, FirstGroup CEO, said: ‘Over the last few months, we have successfully built on the strong financial performance we reported at our full year results in June.

‘Our updated outlook for FY 2024 reflects a strong performance in our First Rail division, which is testament to the hard work and capabilities of our teams.

‘In First Bus, we are delivering sustainable revenue growth as passenger volumes increase and we continue to benefit from the actions we have taken to transform the business.’

Travis Perkins has downgraded its annual profit forecast by as much as 27 per cent, with Britain’s biggest supplier of building materials blaming ongoing tough conditions in the new-build housing and renovation markets.

The group said it now expected 2023 adjusted operating profit to be in the range of £175million to £195million, a 12 per cent downgrade from from previous expectations of £240million.

‘Market conditions remain challenging with continued weakness across new build housing and domestic repair, maintenance and improvements,’ chief executive Nick Roberts said.

Marston’s expects operating profits to improve by more than initially forecast in 2024 after the pub operator slashed £5million of costs with job losses earlier this year.

Pub groups in Britain have been grappling with high costs of raw materials, energy and labour as inflation remains stubbornly high. However, costs have started to ease over the past couple of months.

Wolverhampton-based Marston’s, which reported a 10.1 per cent rise in like-for-like sales for the year to the end of December, is targeting an improvement of at least 200 basis points to operating profit margins over the next two-three years.

Of this, 50 basis points has been achieved through the cost reduction.