Travis Perkins Resumes Dividend, Sees Modest Market Growth

29th Jul 2010 07:30

By Anita Likus Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. builders' merchant and home improvement retailer Travis Perkins PLC (TPK.LN) Thursday said it has resumed payment of its interim dividend as it reported bumper first-half earnings and said it expects modest market growth in the future. The company said there is a risk of wider economic developments impacting the construction market, so it is difficult to predict a recovery, but it expects to see modest growth in the trade market in 2010, while consumer worries will produce a small fall in the retail market value. "Overall, we expect the market in 2010 to be a little stronger than management's original expectations, even after a probable weakening, in the second half-year, of current growth trends," said Travis Perkins. Chief Executive Geoff Cooper said "while we continue to see modest market growth following a severe recession, we view the future with confidence." Travis Perkins, which sells building materials to individual customers and businesses, has been hit hard by the slump in U.K. construction, but says it is now seeing improved trading. It has also cut costs and focused on generating cash flow. It reported a 5% increase in revenue to GBP1.52 billion and an 18.6% increase in pretax profit to GBP107.2 million for the six months to June 30. Signaling confidence and as a result of improved earnings, Travis Perkins resumed paying an interim dividend of 5 pence. The company, which bought specialist distributor BSS Group for GBP658 million, also reduced its debt by GBP103 million to GBP410 million in the six months. Travis Perkins shares closed Wednesday at 830 pence giving the company a market capitalization of GBP1.7 billion. -By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; [email protected] (END) Dow Jones Newswires July 29, 2010 02:30 ET (06:30 GMT)