Rising demand for building materials and home improvement, together with slicker store layouts and wider product ranges, propelled adjusted operating profits up 9 per cent at Travis Perkins (TPK). But hefty investments meant capital spending doubled to £131m; investors reacted by sending shares in the builders' merchant down 3 per cent on results day.
Like-for-like sales and adjusted operating profits rose in three of the group's four divisions. The Keyline and CCF businesses seized share in the commercial building and new house construction markets, driving contracts revenue up 14 per cent. Similarly, the general merchandising division benefited from brisk trading in bricks, blocks and other 'heavyside' building materials, while the remodelling of Wickes stores, improved product ranges and savvier promotions lifted turnover in the consumer segment. But pricing pressure - and the end of a government-backed initiative that replaced old boilers for free - meant underlying revenue slid 3 per cent in the plumbing and heating segment.
Travis Perkins opened 49 new branches and completed the third of its heavyside range centres, which house more than 6,000 products not stocked in its stores. The group can now deliver those to more than 60 per cent of its branches within two weeks.
Broker Panmure Gordon expects EPS of 132p, rising to 145p in 2016 (2014: 116p).
| TRAVIS PERKINS (TPK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,180p | MARKET VALUE: | £5.4bn | |
| TOUCH: | 2,179-2,181p | 12-MONTH HIGH: | 2,270p | LOW: 1,571p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 1,100p* | NET DEBT: | 14% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 2.73 | 154 | 50.5 | 12.25 |
| 2015 | 2.94 | 159 | 51.3 | 14.75 |
| % change | +8 | +3 | +2 | +20 |
Ex-div: 8 Oct Payment: 10 Nov *Includes intangible assets of £2.2bn, or 897p a share | ||||
