Travis Perkins cautious over consumer spending

24th Feb 2010 07:39

Wickes owner Travis Perkins gave a gloomy assessment of the mindset of consumers as sales and underlying profits fell last year with revenues also down in the current year."We are concerned in particular about weak consumer spending trends in 2010 as inflation rises and the cushion of falling mortgage costs annualises out. We expect the home improvement market to contract further in 2010," chief executive Geoff Cooper said."Whilst our markets are no longer exhibiting the abrupt declines in volume that characterised the start of the recession, activity levels remain fragile", Cooper added.For 2009, revenue fell by £248m to £2.93bn with operating profit down 17% to £225m and adjusted profit before tax down 11% to £180m (2008: £202.5m). Pre-tax profits were £213m against £146m after a one-off pension gain this year against losses in 2008.The revenue decrease of 7.8% comprised a decline of 8.6% in like-for-like sales, with network expansion accounting for growth of 1.0% with a reduction in trading days accounting for 0.2%, Travis said.For the 7 weeks to 20 February this year, group LFL sales are down 2.7%, with the merchanting division down by 2.8% and the retail division down by 2.4% with the core and kitchen and bathrooms down 8.0% and up 23.3% respectively. Travis said its recent big ad campaign for Wickes had helped it boost market share but it only expects limited benefit from competitors going out of business in contrast to the large capacity reductions seen in 2009. There is no dividend.