Weather slows Travis Perkins performance
Published:  26 July, 2012

NORTHAMPTON: Travis Perkins has posted a 7.3% rise in half year profit to £137m on turnover up 2.7% to £2.41bn.

Performance in the six months to end June was held back by high rainfall in April and June which disrupted activity at building sites.

"It has been difficult to ignore the impact on the results of the first half trading of the wettest three months since records began," said chief executive Geoff Cooper. “We estimate normal weather conditions would have boosted profits by around £10m.”

"This has inhibited construction activity and particularly constrained turnover in our heavy-side related businesses in a market already struggling to recover to more normal levels."

He said the firm continued to grow gross margin and gain like-for-like market share in all of its four divisions -- general merchanting, specialist merchanting, plumbing and heating, and consumer.

Travis Perkins, which also trades as City Plumbing, Keyline, Tile Giant, Wickes and BSS, raised its interim dividend 23% to 8 pence and said it was happy with consensus expectations for the full year.

Travis Perkins has performed relatively well against a background of weak construction and consumer markets. Travis has increased market share particularly from the purchase of plumbing and heating specialist BSS in 2010 and of Toolstation in January this year.

In its statement, Travis said new build has shown signs of improvement with house-builders reporting increased reservation levels and better prices and forward order books. Contractors and managed services have also performed reasonably well, while RMI activity has been relatively stable during the period.

New public sector spend has been generally weak as the government cuts take effect, but activity levels in some sectors such as rail, where Travis have taken some opportunities to make sales, have been better than expected, it said.

Retail markets have been subdued, particularly for bigger ticket items.

Overall, Travis estimates that merchanting market volumes declined by 4%, in contrast to the consumer markets where volumes are down by at least 10% year-on-year.

Its shares, up 12% over the last six months, closed Wednesday at 971 pence, valuing the business at £2.37bn.

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