Travis Perkins posts positive first half figures, lifts divi 22.5%

30th Jul 2014 09:07

- LFL H1 revenue up 10.2%- Gross margins down 0.8ppt- PTP of £162.5mBuilder's merchant Travis Perkins was a strong riser on Wednesday after posting a 10.2% rise in life-for-like (LFL) first half revenue and a 16% increase in the dividend. The gains were driven by increased customer confidence, improved market conditions and the introduction of a number of self-help initiatives. "We have outperformed our markets and see good growth opportunities for stepping up our investment in the customer proposition, leveraging our superior scale, supply chain capabilities and for network expansion and format optimisation," Chief Executive John Carter said. "These exciting organic growth opportunities along with a clear focus on return on capital should continue to create substantial shareholder value. Trading is consistent with our expectation and with lead indicators in our different markets encouraging, the group is expected to show continued solid growth for the remainder of the year." Group revenue rose 11.5% to £2,731m, or 10.2% on a LFL basis. However, gross margins fell by 0.8 percentage points, reflecting competitive pressure in all but the General Merchanting Division, selective price investment and mix changes. First half net finance costs increased by £2m to £13m (2013: £11m), while adjusted profit before tax rose from £136.1m to £162.5m. The interim dividend was increased by 22.5% from 10.00p to 12.25p. Divisionally, General Merchandising reported LFL revenue growth of 14.6%, Contracts 11.1%, Consumer 6.8% and Plumbing and Heating 7.4%. "All four divisions have seen good revenue growth, and are all outperforming their respective markets," Travis added. Panmure Gordon analyst Rachael Applegate said the group delivered "a positive set of results [...] with a confident outlook for the second half". "We believe that the business will continue to benefit from supportive market conditions, which alongside self-help measures should ensure profitability growth remains strong."Shares had climbed 2.01% to 1,678p by 08:51.NR