Travis Perkins takes cautious stance following Brexit

Earlier today Travis Perkins announced their interim results for the six month period running up to 30th June 2016.

The key highlights are as follows:-

• Revenue increased by 5.8% with like-for-like sales up 3.1% (9.0% on a two-year basis) demonstrating continued outperformance of the market
• Adjusted operating profit increased by 4.9% to £194m 
• Adjusted EPS increased by 7.7% to 58.4p 
• Interim dividend increased by 3.4% to 15.25p per share
• Good adjusted free cash flow generation of £165m, with cash conversion of 85% 
• Gross capital investment of £120m, including £49m of freehold property investments
• Strong balance sheet, with committed long-term funding and significant liquidity headroom to continue investing
• Network expansion of net 14 new branches and stores opened in the half

Statement from their CEO John Carter:-

"The solid performance in the first half of 2016 reflects our leading market positions, the hard work of our teams and the investments we have been making to improve all aspects of our business. The investments to extend our range, build out our distribution infrastructure, expand our network and accelerate our online growth have helped us continue to win market share and to position us well for the future. We plan to continue to invest in our businesses where we can generate strong returns and create value for our shareholders over the long-term. 

It is clear that the result of the EU referendum has created significant uncertainty in the outlook for our end markets and we did experience weaker demand in the run up to and immediately following the referendum. Our two-year like-for-like sales in July have been below the levels we experienced in the second quarter, however we have seen a gradual improvement through the course of the month. In our view it is too early to precisely predict end market demand and we will continue to monitor the lead indicators we track and will react accordingly.

We have a proven track record of reacting swiftly to changes in market conditions, and the strength of the Group's balance sheet, the competitive advantage we have created through the investments we have made and our ability to flex the cost base leaves us well positioned to continue to win market share and drive shareholder value over the medium term."

Source: Travis Perkins PLC

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