Travis Perkins posts double-digit profit growth, but gives cautious outlook

3rd Mar 2015 07:55

Builders merchant and home improvement group Travis Perkins hiked its dividend by over a fifth after posting a double-digit increase in profits for 2014.However, it said that recent growth trends in the housing market have moderated and cautioned about possible "volatility" arising from the general election in May.The company, which owns chains such as Wickes and Toolstation, reported an adjusted pre-tax profit of £362.3m, up 12.8% on 2013. Adjusted earnings per share increased 14.9% to 119p, slightly ahead of the consensus estimate of 118.18p.Group revenues rose 8.4% to £5.6bn, with like-for-like sales up 7.3%, helped by more favourable weather at the start of the year.Growth was also boosted by a 13.7% increase in sales at the general merchanting division, which the company said significant outperformed the market, while revenues from contracts and consumers rose 12.1% and 8.8% respectively.But sales at the plumbing and heating division declined by 0.9% due to fewer Energy Company Obligation contracts, a declining boiler market and some branch conversion disruption.The group declared a final dividend of 25.75p per share, taking the full-year payout to 38p, up 22.6% on 2013.Looking ahead, the company said the key lead indicators monitored by management show that the "drivers of activity have settled into a more sustainable and consistent trend".It said: "Mortgage approval rates and subsequent housing transactions began to moderate in 2014 and this is not expected to significantly reverse in 2015. The upcoming general election may also create some short-term volatility."However, it also noted that consumer sentiment has improved with employing and wages both rising.The stock was down 1.3% at 1,999p by 08:22.