17th Oct 2013 08:20
LONDON (Alliance News) - Builders merchant and DIY company Travis Perkins PLC Thursday saw its shares come under pressure as it warned that consumer DIY store Wickes was still having to reduce prices due to competition in the sector, even though overall sales were firmly higher and it said it was on track to meet its earnings target for the full year.
The company said total sales were up 8.6% in the third quarter, or 7.1% adjusted to compare the same number of trading days as in the year-earlier period, fueled by strong sales of plumbing and heating products to trade customers. Like-for-like sakes were up 6.3%.
In a statement, Travis said it was on track to achieve earnings per share of about 100 pence despite property disposal gains being some GBP5 million less than it previously expected.
While trade sales grew strongly, its like-for-like retail sales were flat in the quarter compared with the 8.6% growth achieved in the two months to June 30. The company said neither Wickes nor Tile Giant benefitted from the hot, summer weather because of their limited ranges of outdoor products. The company said it had partially offset the decline with cost cutting.
"The deflationary pressure in our trade businesses, although still negative, began to ease in the quarter. Wickes, however, continued to experience more pronounced deflation. The group anticipates no significant change in the levels of price inflation through the remainder of the year," Travis Perkins said in a statement.
It said the pickup in its trade markets had meant it had to invest more working capital, and it now expects net debt to be between GBP350 million to GBP370 million at the end of the financial year.
Travis Perkins shares were down 2.7% at 1,730 pence Thursday morning, the biggest decline on the FTSE 100.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Travis Perkins