Travis Perkins provides boost for investors with half-year profit growth
Profits, turnover and share price were all up at one of the UK’s leading building merchants, Northampton-based Travis Perkins, in its interim results for the six months ended 30 June 2006.Turnover, at £1,412 million, was up by nine per cent over the comparable period last year, mainly reflecting an extra six weeks trading at Wickes and the impact of its branch expansion programme.
The Wickes deal has so far proved a good buy for Travis. Along with the rest of the group it showed a year-on-year improvement in profits and had exceeded targets from synergy and buying gains from the acquisition by £20m. The final phase of Wickes’ rationalisation is expected to be largely complete in early 2007.
Profit before tax increased by 0.4 per cent to £110.4m with a year-on-year improvement from both the Wickes related business and from the rest of the group. Operating profit was up 1.3 per cent to £139.2m (2005: £137.4m).
Travis said its markets were gradually recovering from the poor trading conditions of 2005 and that a stronger housing market over the past winter had boosted the trade market, where repair and maintenance activity has increased.
Travis’ share price rose 113 pence, before settling at 1610 pence a share, up 5.57 per cent and 85 pence.
Chief executive for the group, Geoff Cooper, said: “We have secured our targeted year two synergy and buying gains from the Wickes transaction, with those targets some £20 million in excess of the estimated for synergies made when the transaction was commenced.
“We maintain our view that there will be a gradual recovery in market activity in the second half and we are well positioned to benefit from this.”