31st Jul 2018 10:14
LONDON (Alliance News) - Travis Perkins PLC on Tuesday swung to a pretax loss in the first half of 2018 and said that annual adjusted earnings will be at the bottom end of market views.
Shares in the builders' merchant and home improvement retailer were down 12% at 1,184.50 pence each, the top faller in the FTSE 250 index.
The company, which operates Wickes and Toolstation branded chains of DIY stores in the UK, recorded a pretax loss of GBP123.4 million for the six months to June 30, compared with pretax profit of GBP167.6 million a year ago, on a revenue of GBP3.36 billion and GBP3.22 billion, respectively.
Adjusted pretax - the company's preferred measure - dropped to GBP167 million from GBP175 million.
The swing to loss was attributed to weak kitchen and bathroom sales, higher impairment costs and higher sales of lower margins products.
"Our consumer-focused business, Wickes, has had a far more challenging period as weaker consumer spending trends, combined with a difficult competitive environment, have held back profitability. Consequently, the Wickes team is executing a significant cost reduction programme. Whilst these savings will help drive improved profitability through the second half of the year, Wickes’ profits will be lower than previously expected," Travis Perkins Chief Executive John Carter said.
"Against a backdrop of changing market conditions which are expected to continue for the foreseeable future, the group has commenced a comprehensive review of its business, with a view to driving stronger performance and enhanced value for shareholders in the medium term," Carter added.
Travis Perkins has maintained its interim payout at 15.5 pence per share.
It expects 2018 earnings before interest, taxes and amortisation to be in the lower half of the range of analyst expectations. As at July 30, the range of market expectations for full-year 2018 group Ebita was GBP360 million to GBP390 million.
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