Weaker consumer spending and a competitive market means Britons haven't been keen to renovate their homes. This is a big problem for Wickes, the supplier of do-it-yourself supplies, owned by Travis Perkins (TPK). A cost-saving programme is under way, but Wickes has significantly underperformed, leading to a massive £246m impairment charge in the first half. Full-year profits for that business are now expected to land at around £360m to £375m this year, below previous estimates of £360m to £390m. Finance director Alan Williams said certain initiatives had clawed back roughly £9m in the first half, with the same savings expected again before the year-end.
Trade markets fared a little better. The plumbing and heating business saw operating profits improve by 54 per cent £20m thanks to volume growth across all three distribution channels and a 70 basis point widening in operating margins to 2.6 per cent. Mr Williams said the "transformation" programme announced a year ago was behind the improved performance. Going forward, management expects the trade market will be more robust, while the consumer business will be more challenging.
Analysts at Citi expect pre-tax profits of £345m during 2018, giving EPS of 111p, compared with £343m and 110p in 2017.
| TRAVIS PERKINS (TPK) | ||||
| ORD PRICE: | 1,188p | MARKET VALUE: | £ 2.99bn | |
| TOUCH: | 1,188-1,189p | 12-MONTH HIGH: | 1,618p | LOW: 1,178p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 1,050p* | NET DEBT: | 17% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 3.22 | 168 | 53.6 | 15.5 |
| 2018 | 3.36 | -123 | -59.8 | 15.5 |
| % change | +4 | - | - | - |
| Ex-div: | 4 Oct | |||
| Payment: | 9 Nov | |||
| *Includes £1.69bn of intangible assets, or 670p a share | ||||
