Travis Perkins warns of rising bad debt charges

By Matthew Scuffham

LONDON (Reuters) - Travis Perkins (TPK.L) Finance Director Paul Hampden Smith has warned the proportion of bad debt written off by the building materials group is set to rise, while the group is guiding down analysts who are at the top end of the range of 2009 earnings forecasts.

Hampden Smith told Reuters that about 0.5 percent of credit sales are currently being written off as bad debt, compared with an average of 0.4 percent.

"It doesn't sound too bad but the run rate isn't that good and it's a worrying trend. We are on a high level of alert on our credit control at the moment. The bad debt charge is probably only going to go one way," Hampden Smith warned.

He said that, while the bad debt charge is not expected to become as bad as the 1 percent since in the early 1990s, it is likely to get to a level between 0.5 and 1 percent going forward.

Hampden Smith said the group is comfortable with market forecasts for 2008 earnings but guiding down analysts currently sitting at the top of the 2009 range.

He said earnings per share (EPS) forecasts for 2009 range between 130 pence at the top and the "high 90s" at the bottom.

(Reporting by Matthew Scuffham, Editing by Mark Potter)