Kitchen sinks Travis Perkins

13th Dec 2011 08:00

Builders' merchant Travis Perkins said like-for-like (LFL) turnover per trading day in the first 11 months of 2011 was 2.8% higher than in the corresponding period of last year, despite consumers' reluctance to splash out on new kitchens and bathrooms.The Wickes owner, which bought plumbing supplies firm BSS last year and which offloaded its Buck and Hickman tool distribution subsidiaries in October 2011, said overall turnover in the first 11 months of 2011 was up 54.1% on the same period of 2010.On a pro-forma basis (including BSS but excluding Buck and Hickman), turnover in the period was up 5.5% year-on-year, despite the corresponding period of last year having one extra trading day for the merchanting and BSS divisions.Focusing just on the merchanting division, total turnover was up 11.3%, with LFL turnover per trading day up 9.3% on a year earlier. LFL turnover per trading day for October and November increased by 8.0% in the merchanting division.In Wickes, LFL delivered sales in the eight weeks to the end of November were down 6.8%, with kitchen and bathroom sales proving a drag, reflecting continued poor and weakening consumer confidence for major purchases.Total turnover for BSS for the first eleven months of 2011 (excluding Buck & Hickman from both years) was up by 2.4%, with like-for-like turnover per trading day up by 2.8%. Like-for-like turnover per trading day for the last two months to 30 November increased by 2.7%.The group remains on target to hits its net debt target of £600m at the end of 2011. Analyst Guy Hewett from Investec said: "While we believe Travis is performing well against difficult markets and outlook, the valuation reflects this in our view and we retain our hold recommendation."Northland Securities, meanwhile, reckons that with synergies from acquisitions such as BSS and some Focus stores yet to feed through fully, "Travis Perkins remains the building products distributor to beat." "Wickes, as the retail component of the group alongside Tile Giant, is in the teeth of consumer concerns but even in this environment, its ability to find and enhance lower cost routes to market supported by well-targeted advertising campaigns is offering real support to its margin potential," Northland analyst Simon Brown maintains. --jh