Travis Perkins profits washed out by weather

Kasmira Jefford
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BUILDERS’ MERCHANT Travis Perkins blamed the unseasonably wet weather for stalling construction activity in the first half of the year and wiping £10m off profits.

The company, which owns brands such as City Plumbing and Tile Giant, said revenues fell 0.7 per cent to £2.4bn on a like-for-like basis, with “exceptional” bad weather impacting its business in the second quarter.

“Whilst weather patterns normally average themselves out over any trading period, it has been difficult to ignore the impact on the results of the first half trading of the wettest three months since records began”, Geoff Cooper, chief executive said.

“This has inhibited construction activity and particularly constrained turnover in our heavy-side related businesses in a market already struggling to recover to more normal levels.”

The construction and home improvements retailer, made an adjusted pre-tax profit of £137.7m in the six months to 30 June, down 1.9 per cent compared with the same period the previous year.

But the firm has continued to grow gross margin and gain like-for-like market share in all of its four divisions -- general merchanting, specialist merchanting, plumbing and heating, and consumer -- and manage costs tightly.

Though both construction and consumer markets have been weak in the economic downturn Travis Perkins has performed relatively well, winning share from rivals and benefiting from acquiring plumbing and heating specialist BSS in 2010 and Toolstation in January this year.

Analysts at Liberum Capital said Travis Perkins should be well placed to benefit from “resilient or even rising home improvement spend” as inflation pressure on disposable income starts to fall.

The group announced a dividend of 8p, up 23 per cent from last year. Net debt, meanwhile, fell just under £20m to £563.5m.

Cooper said while forecasting remained difficult due to declines in public sector spending in the construction industry, it was happy with full year consensus expectations.