Canaccord expects 'some bounce back' from Travis Perkins

While Canaccord Genuity expects "some bounce back" in Travis Perkins' second-quarter trading thanks to better weather, the broker believes that profits are still likely to be down on lost sales due to the cold winter.

Canaccord expects TP's contracts unit to have performed relatively well and its plumbing and heating to keep seeing strong top-line growth as it continues to take market share.

However, the Canadian broker anticipates trading at TP's general merchanting division to "remain difficult", with margins and profits down year-on-year, and for the firm's consumer business to likely see profits fall due to a "generally tough backdrop".

Overall, Canaccord expects TP to reiterate that trading conditions remained mixed, leading management to continue its focus on trimming costs to recoup lost profits due to the poor start to the year.

"We believe, on balance, that guidance for EBITA of c.£380m will remain broadly unchanged at this stage," Canaccord said.

"Generally we don't see any respite from the challenging macro backdrop which has been limiting profit growth over the last few years, and we remain cautious in the near term after the recent share price bounce," added the broker.

Canaccord reiterated its 'hold' rating and 1,420p target price on Travis Perkins.