Travis Perkins (LSE:TPK) shares rose on Tuesday after the UK’s largest distributor of building materials reported a 2.1% fall in first-half revenue to £2.3 billion, as operational challenges hit performance early in the year.
Analysts said the update was broadly as expected, with underlying sales from the merchanting arm showing signs of improvement and actions to stabilise the business taking effect.
Merchanting like-for-like sales fell 1% in the second quarter, an improvement on the 3.2% decline seen in the first three months, and the group said it had arrested the trend of market share loss.
Adjusted operating profit came in at £63 million, down 24% year on year, reflecting lower volumes in Merchanting.
Statutory operating profit rose to £59 million from £48 million a year ago, helped by progress at Toolstation UK, where operating profit rose 50% to £21 million.
Chair Geoff Drabble said, “In the second quarter, we delivered improved revenue performance and stabilised Merchanting market share and these trends have continued into July.”
The group said full-year profit is expected to be broadly in line with market forecasts, as management continues to focus on driving volume, controlling costs and further system enhancements.
Stifel described the half-year results as broadly in line with expectations, noting that merchanting like-for-like sales showed improvement, narrowing from a 3.2% decline in the first quarter to a 1% drop in the second.
It rates the shares a 'buy' up to 750p, noting Travis' tangible net asset value is closer to 820p.
The shares rose 2.57p to 545.57p.