Travis Perkins reports 12.7% LFL sales rise

Travis Perkins PLC said Thursday that like-for-like sales in the first quarter came in 12.7% higher as the firm continued to build momentum after a weaker trading comparisons in 2013.

The group said like-for-like sales were 12.7% higher than last year, with sales up 14.2% on a comparable trading days basis. First quarter total sales increased 15.6%.

While encouraged by the quarter's results, the firm notes that the growth was in part due to "very weak comparatives owing to unseasonably cold weather in 2013 across much of the country." However, Travis Perkins also said that the strong growth for the quarter continues the positive momentum built in 2013.

The firm said its General Merchanting division performed well during the quarter, due to continued market share gains and market volume growth. The Plumbing & Heating and Contracts divisions also performed well. Within the Consumer division, sales growth for Toolstation and the Wickes core proposition was strong. However, the kitchen and bathroom categories in Wickes were impacted by significant promotional activity in this market, said Travis Perkins.

While the sales price deflation experienced in 2013 dissipated in the first quarter of 2014, said the company, not all of the cost price increases from manufacturers were fully passed through to customers. Investing in better value for retail customers also continued in Wickes during the first quarter.

There has been no significant change in the Group's financial position, it said.

Following from its strategic plans announced in December, the firm said it is progressing with the directive, including work on expanding its network and better its use of space. These plans remain the core focus for the company, said John Carter, Chief Executive, "Our priorities remain to accelerate innovation of our customer propositions, expand and optimise our property network, exploit our scale advantage and prioritise investments throughout the portfolio."

The company said it is encouraged by its first quarter results and anticipates growth to continue, "All of our businesses recorded strong sales growth in the first quarter of 2014 and lead indicators for our different markets are encouraging and performing and we remain on course to meet our targets set out in February. We are confident that the plans we have in place will support our drive to outperform our markets, improve earnings and ultimately increase return on capital."

In February Travis Perkins reported an increase in profit for its full-year, but warned that although recovery for the building market continues to improve it is "still early days."

The FTSE 100 company said it finally saw its markets come out of recession as confidence in the building industry driven partly by the government's Help-to-Buy scheme, picked up. However, it noted that the UK market for building and construction materials was 13% below the peak levels of 2008 as at December 2013. New build makes up 20% of the business with the rest consisting of repair and maintenance.

Shares in Travis Perkins were trading 1.20% higher Thursday morning at 1,854 pence per share.

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Source : Alice Attwood - London South East
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