Travis Perkins shares soar as adjusted profits beat forecasts

Shares in UK building materials retailer Travis Perkins soared in early trade as adjusted pre-tax profits came in above forecasts.

The company on Tuesday reported a full year pre-tax loss of £49.4m compared with a profit of £289.7m a year earlier as it took a £246m hit on its Wickes business and announced the departure of its chief operating officer.

Revenue rose to £6.74bn from £6.43bn with growth primarily driven by the company's plumbing-and-heating and contracts divisions, and the Toolstation business.

Given current market uncertainty, the group said it expected adjusted operating profit in 2019 to be similar to 2018.

Adjusted pre-tax profits were better than expected, 1.2% higher to £347m, against the consensus of £334m. The board declared a full-year total dividend increase of 2.2% to 47p a share.

Chief operating officer Tony Buffin was departing as part of a boardroom restructure which saw his role axed.

The company said the long-term drivers of market growth “remain favourable, supported by the on-going requirement for more homes in the UK, and the underinvestment in the repair, maintenance and improvement of existing dwellings and infrastructure”.

However, it warned that in the near-term “considerable economic uncertainty remains”, which was driving the current mixed backdrop of market lead indicators.

“Levels of mortgage approvals and housing transactions remain subdued, house price growth is inconsistent across the UK and depressed consumer confidence continues to put pressure on wider retail sales figures across many UK consumer facing markets,” the company said.