17th Oct 2014 09:10
LONDON (Alliance News) - Travis Perkins PLC Friday said the encouraging momentum in its business reported in its half-year results has continued, with total sales and like-for-like sales growing in the third quarter and trading consistent with that seen in the first half, though shares in the group dropped as the sales growth rate slowed against the first half.
The FTSE 100-listed building merchant said total sales increased 6.9% in the quarter to September 30 year-on-year, with like-for-like sales increasing 5.7%. In the first half, sales increased 10.2%.
The reported slowdown caused shares in the company to decline 0.6% to 1,628.00 pence in morning trade, making it one of the worst performers in the index.
The group saw positive sales growth for the majority of its business lines, albeit at slower growth rates than in the first half. General Merchanting total sales were up 11.9% in the quarter, slower than the 15% growth seen in the first half. Its Consumer arm also posted 8.5% sales growth, slightly slower than the 8.8% rise in the first half. The Consumer arm incorporates the Wickes DIY chain.
Contracts revenue also slowed, rising 9% in the period against a 12% increase in the first half.
But the Plumbing & Heating business proved a weak spot, with sales declining in the third quarter by 5.1%, compared to an 8.5% rise in the first half.
It said the Plumbing & Heating business had suffered from the branch network reconfiguration it undertook, with market volume declining due to a later start for the plumbing and heating season. The UK experienced an unusually warm September.
Travis said it expects the difficult market conditions for the business to continue in the next six to nine months.
In the year to date, total group sales have increased 9.8% on the year-prior period, the group said, with like-for-like sales rising 8.6%.
Price inflation in the quarter was slightly below expectations, the group said, with General Merchanting and Contracts posting inflation at broadly the same levels as the second quarter.
Plumbing & Heating saw further price deflation due to a competitive market and weak volumes, the company said, while Wickes price inflation continued at similar levels to the first half.
"Trading has remained strong for most our our businesses, and the group's continued good performance is underpinned by the successful introduction of a number of self-help initiatives," said Travis Perkins Chief Executive John Carter.
"We have outperformed our markets whilst making strategic investments that we are confident will support continued market share gains," Carter added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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