The FTSE 250 group said on Tuesday that the high levels of growth experienced in March have continued throughout the second quarter, driven by the strength of both the domestic and commercial repairs, maintenance and improvement (RMI) markets.
Merchanting business have recovered “strongly” while the performance of Toolstation was said to be ahead of expectations.
Inflationary pressures are being seen across a number of product ranges, amid high demand and supply constraints, but the group said it was working with suppliers and customers to “ensure consistency of supply and fair outcomes for all”.
Deutsche Bank’s analysts sent a note to clients on Wednesday upping their rating from ‘hold’ and boosting their share price target to 2056p from 1707p, with the shares rallying over the previous afternoon to close at 1725p.
With the company raising its 2021 operating profit guidance to “at least £300mln”, the bank has raised its forecast to circa £303mln from around £253mln before.
“The demerger of Wickes – a very good retail business that shared limited synergies with the group – and the sale of its P&H distribution business leave the group focused on the trade, which enhances its capital allocation abilities,” the analysts said.