Travis Perkins (TPK) is 12 months into a five-year plan to expand the business and take advantage of what its chief executive, John Carter, describes as a slow return to growth within the housing sector. Key to growing market share, he says, is the expansion of the group's network: 54 new trading locations opened during the year.
This helped the group outperform the market and increase adjusted operating profits by more than 10 per cent to £384m. Three of Travis Perkins' four divisions posted top-line growth, reflecting an improving housing market and various self-help measures. The builders' merchant also pruned its portfolio, disposing of its underperforming Rinus Roofing business.
Revamping the business, however, had an impact on reported earnings. There were £29m of costs relating to the restructuring of its plumbing and heating division - the only division to shrink last year - into two entities with distinct operating models. Subsequent disruption for branch conversion, together with a declining boiler market and fewer energy-company obligation contracts, contributed to a 20 basis point decline in adjusted gross operating margins at the group level.
Broker Citi forecasts adjusted pre-tax profits of £413m for the year ahead, giving EPS of 133p (up from £369m and 117p).
| TRAVIS PERKINS (TPK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,001p | MARKET VALUE: | £5.0bn | |
| TOUCH: | 1,984-1,999p | 12-MONTH HIGH: | 2,045p | LOW: 1,538p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 1,076p* | NET DEBT: | 13% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 3.15 | 197 | 69.6 | 15.0 |
| 2011 | 4.78 | 270 | 90.3 | 20.0 |
| 2012 | 4.84 | 313 | 108.9 | 25.0 |
| 2013 | 5.15 | 313 | 109.9 | 31.0 |
| 2014 | 5.58 | 321 | 105.9 | 38.0 |
| % change | +8 | +3 | -4 | +23 |
Ex-div: 30 Apr Payment: 1 Jun *Includes intangible assets of £2.2bn, or 894p a share | ||||
