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Travis Perkins shares tumble after profit growth hit by summer lull

Published 22/10/2015, 10:01
© Reuters.  Travis Perkins shares tumble after profit growth hit by summer lull
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By Paul Sandle

LONDON (Reuters) - Travis Perkins (L:TPK), owner of home improvements chain Wickes and heating supplies group BSS, said its sales growth had been constrained by a lull in trading over the summer, sending its shares to an 11-month low.

Britain's biggest building supplies group said on Thursday like-for-like sales grew 2.6 percent in the three months through September, a slowdown from 5.7 percent growth posted in the first half.

Chief Executive John Carter said Travis had planned for a modest reduction in demand through the summer, given a slowdown in the housing market towards the end of 2014 and early part of 2015, but demand had been weaker than anticipated.

One possibility was that local builders, bricklayers and electricians had downed tools to take advantage of the strong pound to go abroad, Carter said.

Official figures supported the idea of a summer lull, with data from Britain's Office of National Statistics published in October showing repair and maintenance output in June, July and August falling 4.6 percent on the same period a year earlier.

Travis Perkins said the fourth quarter had started more encouragingly, with all impacted businesses showing a pick-up in growth, but the weak summer trading would result in full-year earnings coming in at the lower end of forecasts.

Before the statement, analysts had expected adjusted operating profit of between 414 million pounds and 437 million, up from 384 million in 2014.

Shares in Travis Perkins, which joined the blue chip FTSE 100 index (FTSE) in June 2014, were trading down 7 percent at 1,827 pence by 0755 GMT on Thursday, having fallen as low as 1,806p, their lowest since January.

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