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Travis Perkins leaps as Wickes steadies and plumbing sale gets nearer

There is an encouraging improvement in trading and good momentum in Wickes, said CEO John Carter

Travis Perkins
Group is making good progress on preparing the disposal of the Plumbing & Heating division

Shares in Travis Perkins plc (LON:TPK) shot higher as the builders merchant said trading at Wickes has stabilised while the proposed sale of the Plumbing & Heating division is making progress. 

The buildings materials group, which dates back to 1797, reported 4.8% growth in revenues in 2018 driven by its Contract Merchanting businesses and its online retailing subsidiary Toolstation.

“Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term," said John Carter, chief executive.

READ: RBC thinks Travis Perkins can return half of its market cap to shareholders over the next five years

Broker Liberum maintained its buy rating with a target price of 1450p: “Travis Perkins’ FY results came in ahead of expectations, with pre-tax profit up 1%, 7% better than expected.” 

AJ Bell added: “The stars appear to be aligning for Travis Perkins. The builders’ merchant is simplifying its structure, reinvesting cash in the best parts of the business, trading is picking up in its consumer-facing brand Wickes, and operating profit improved in the second half of the year after a difficult first half.”

For the financial year ended 31 December, adjusted operating profit declined by 1.3% to £375mln while adjusted EPS grew by 3.7%. Revenues were £6.7bn. 

The annual dividend increased by 2.2% to 47p per share. 

Separately, Travis said Tony Buffin is stepping down from the board today and will not be replaced as chief operating officer. 

Shares in the FTSE 250 member leapt 9.6% to 1,391.5p. 

-- Adds analyst comment, share price --

Quick facts: Travis Perkins

Price: 1158 GBX

LSE:TPK
Market: LSE
Market Cap: £2.91 billion
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