Travis Perkins has said that while it has seen stability return to its markets, it is anticipating tough times ahead.
Sales at Wickes, its DIY business, held up much better than expected, rising 3.2 per cent for the year, while the merchant business fared much worse, with sales falling 13.5 per cent when comparing stores open for the full year.
Sales for the group fell by 8 per cent to £2.9 billion, while pre-tax profit fell 8 per cent to £180 million.
Bosses were cautious at the start of the recession and planned well in advance for the tough times expected.
Travis Perkins chief executive Geoff Cooper said: “While our markets are no longer exhibiting the abrupt declines in volume that characterised the start of the recession,
activity levels remain fragile.
“At this stage there is no clear indication of when our markets might return to growth again. Although we believe this might be evident by the end of 2010, we are also wary of the probable ‘false starts’ that we expect to see.
“We estimated that in response to the difficult economic circumstances in the UK, volumes in our markets would fall from their peak in late 2008 by about 25 per cent and reach a low point in mid-2009.
“Our view of 2009 now points to an overall trough of 25 per cent, but the trough in merchanting of a little over 30 per cent occurred a few months later than we forecast, while the retail trough of around 15 per cent occurred in the first quarter of 2009.”
Pointing to the difficult and uncertain period ahead, directors have decided not to resume paying dividends, saying: “The board has concluded that there remains too much economic uncertainty for it to be able to recommend to shareholders the reinstatement of the dividend at this time.
“We expect to resume dividend payments once uncertainty is reduced and improved prospects for our markets are visible.”