Travis profit lift fuelled by DIY recovery

BUILDERS’ merchant and do-it-yourself retailer Travis Perkins said yesterday it was currently trading well because essential repair and maintenance work suspended in the recession was now being done.

The firm posted a better than expected 20.4 per cent rise in 2010 underlying profit to £216.7m.

It said it had gained market share from rivals and said it had made a strong start to 2011, although it does expect conditions for the next 12 months to remain difficult.

The group, which has more than 600 branches, said it expected the merchanting sector to continue its gradual recovery this year.

Chief executive Geoff Cooper said: “There is considerable gloom in the wider economy, but we do not subscribe to the double dip theory.

“We are seeing a lot of repair and maintenance work being done that was delayed and that is helping to offset some of the more difficult times that we are seeing in other bits of construction.

“In public sector (work) in 2011 and 2012 and indeed in 2013 we are going to see further contraction and I think it’s the private sector that’s gradually going to come back and offset that contraction.”

He forecast “very low single digit” growth in the overall UK merchanting market in 2011 along with a “mid single digit” contraction in the overall DIY market as worries over job cuts and rising inflation impact. He expects Travis Perkins to outperform both markets.

Travis said all 11 businesses in its portfolio outgrew their rivals and increased profits in 2010.

It said its acquisition of BSS for £558m had been a success. The move last year was its biggest acquisition since it bought Wickes for £950m in 2005.