Market stable says Travis Perkins

Published:  18 December, 2009

NORTHAMPTON: Travis Perkins offered a glimmer of encouragement on trading after seeing a steady revival in activity at home improvement arm Wickes.

The group, which has nearly 1300 locations in the UK, added that recent trends suggested the builders' merchant market had also stabilised.

It forecast that earnings will be towards the upper end of market expectations for 2009, but warned that the likely pressure on both consumer and trade spending meant it maintained a cautious view on prospects next year.

The company said the nine weeks to November 28 saw Wickes post strong market share gains, with like-for-like turnover per day up by 10.2%. The figure was 2.3% higher in the first 48-weeks of the company's financial year.

At the merchanting arm, like-for-like turnover per trading day was down by 14.3% across the 48-weeks, improving to a decrease of 5.5% in the last two months as comparatives with the same period a year earlier start to ease.

The company added: "The decline in volume relative to peak levels in early 2008 appears to have reached a plateau, but we have yet to see any signs of any sustained improvement."

Numis Securities said trading at Wickes and the benefits of cost reductions meant it would revise its 2009 estimates by 6% - its third upgrade this year.

Analyst Howard Seymour said: "With many of the cost savings now in place, however, we do not believe there is a further incremental benefit to come through in 2010, and given the tough outlook which is likely to prevail, we are not changing our 2010 estimate."

Numis is forecasting pre-tax profits of £186m, down from £200.9m a year earlier.

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