Trade sales help offset weak UK for Travis Perkins
Building materials supplier Travis Perkins said a pick up in demand from trade buyers helped to offset “significant” pricing pressure in its UK operations in the third quarter.
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Underlying sales rose 4.1% during the period as the company said it expected full-year earnings to be in line with expectations of £363m. Total sales were up 3.9% for the quarter.
Sales price inflation “reduced modestly” to 1.9% and was primarily driven by the successful pass through of commodity-price inflation to trade customers.
Chief executive John Carter said trade-focused businesses delivered good sales growth “against a challenging market backdrop, including successful recovery of cost price inflation”
He added that the UK DIY market continued to be “very challenging” for its Wickes chain where “significant price pressure and weak consumer confidence is providing a tough trading backdrop”.
“Across the group, we are making good progress with the cost reduction activities that were highlighted in July, and these actions are generating positive results and underpin our confidence that our full-year performance is on track and in line with market expectations," he said.
Analysts at Liberum said Travis Perkins shares "are extremely unloved here and look very cheap, on 5.5X ev/ebitda 2019E" and rated the stock a "buy".