Building materials big-hitter Travis Perkins (LSE: TPK) has found itself heavily on the back foot after releasing patchy trading numbers on Thursday. The stock plunged to three-month lows earlier in the session and, despite recovering ground, was still last 7% lower from the mid-week close.
Travis Perkins announced that revenues grew 4.6% during the year to December 31, to £6.2bn, while on a like-for-like basis sales rose 2.7%. This is down from the 3.8% rise in underlying takings the previous year. As a result pre-tax profits at the firm rattled 67% lower to £72.7m.
Travis Perkins cited "structural challenges" at its Plumbing & Heating division as a contributor to last year's poor performance, and the need to take steps to create "a more focused branch network." Furthermore, the retailer warned that rising inflation could put consumer spending under pressure during the year ahead and with it demand for its goods.
Despite this worrying full-year release however, the firm lauded its exceptional cash flows and hiked the 2016 full-year dividend to 45p per share from 44p a year earlier.
But this projection missed estimates. A 45.7p per share reward was widely anticipated and Travis Perkins' warnings of difficult market conditions and rising costs, allied with the need to ramp up its restructuring drive, could see forecasts for this year and next also fall short.
The City currently predicts dividends of 47.5p and 51.5p in fiscal 2017 and 2018 respectively, figures that yield a chunky 3.3% and 3.6%. But with pressure rising across the business, I reckon investors could find more secure income picks elsewhere.
Like Travis Perkins, theme park powerhouse Merlin Entertainments (LSE: MERL) has a strong record of lifting dividends year after year.
And like the building specialist, Merlin Entertainments also found itself retreating after releasing full-year numbers of its own. The stock was last down 4% from Wednesday's close.
Merlin advised that revenues surged 11.7% during the year to December 24, to £1.4bn, with visitor numbers ticking 1.3% higher to 63.8m.
However, it had favourable currency movements to thank for last year's magnificent top-line performance -- at constant exchange rates, revenues rose by a far-more-modest 3.6%.
Indeed, the business saw operating profit at constant currencies dip 6.2% last year, to £320m, "due to challenging trading in a number of key markets not fully offset by cost mitigation actions taken throughout the year."
Merlin has seen sales growth slow in its Midway and Legoland arms more recently, the company citing a rise in international terrorism in particular on footfall.
The City expects double-digit earnings growth this year and next at the firm to push last year's 7.1p per share dividend (this also missed estimates of 7.2p) to 8.1p and 9.4p respectively. These projections yield 1.7% and 2%.
But investors should be braced for payouts once again missing targets as headwinds rise across its global parks network.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.