Margin strain at Travis Perkins

The operational review certainly bears this out. Revenues picked up markedly in the final two months of the period, resulting in a 7 per cent comparative increase, following a 1.2 per cent decline between January and April. Mr Cooper also cited the government's Help to Buy housing scheme as a factor in the sales rebound, but it seems somewhat premature to link the two. Nevertheless, comparative revenues at the consumer division (largely comprising Wickes) contracted by 5 per cent during the first four months of the period, but expanded by 8.6 per cent in May and June.

Travis Perkins struggled to pass through price increases from suppliers, resulting in a 2.3 per cent fall in adjusted operating profits to £148m. The main problem was linked to the general merchanting division, which generates well over half of group profits; a change in the business mix fed through into a 110 basis point reduction in the division's operating margin to 9.7 per cent.

Still, the group managed to drive up adjusted free cash flow by 17 per cent to £116m, allowing it to retire another £46m in net debt and sharply boost the dividend. Broker Goodbody forecast adjusted 2013 EPS of 96.4p (91.8p in 2012), rising to 117p in 2014.