August 2, 2017 / 6:51 AM / 2 years ago

Travis Perkins profit falls on tough plumbing and heating market

A worker stacks timber at the Vauxhall depot of building material supplier Travis Perkins in London, Britain October 25, 2013. REUTERS/Neil Hall/File Photo

LONDON (Reuters) - Travis Perkins (TPK.L), Britain’s biggest supplier of building materials, on Wednesday reported a 2.1 percent fall in first-half operating profit, reflecting a weak plumbing and heating market and recent investments.

The group, which trades from over 20 businesses including Travis Perkins, Wickes, BSS, Toolstation and Tile Giant, detailed a plan to stabilise the performance of its troubled plumbing and heating division and “create more options to maximise shareholder value.”

It said it remained cautious on the economic outlook for the second half.

The group’s customers include local authorities, big building firms, traders such as plumbers and kitchen fitters and regular consumers, with its fortunes closely tied to housing transactions and consumer confidence.

For the six months to June 30 Travis Perkins made an adjusted operating profit of 190 million pounds ($251 million)down from 194 million pounds, despite a 3.5 percent rise in revenue to 3.22 billion pounds. The interim dividend was raised 1.6 percent to 15.5 pence.

In the first half the group took the decision to recover input cost inflation by raising prices.

“Whilst this had some impact on trading volume, it enabled us to maintain group gross margins and positions the business well for the future,” said Chief Executive John Carter.

Shares in Travis Perkins, up 5.4 percent so far this year, closed on Tuesday at 1,530 pence, valuing the business at 3.85 billion pounds.

Reporting by James Davey, editing by Louise Heavens

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