Travis Perkins builds momentum in second quarter

Building materials group Travis Perkins posted robust first-half results in the face of continued wobbles in the plumbing and heating market, with sales growth accelerating in the second quarter and the dividend lifted 20%.

The FTSE 100 group said there were "signs of recovery" in the bathroom installations market, served by its City Plumbing, which management is looking to exploit by converting 180 of its PTS-branded branches to City Plumbing in the period, with 94 completed so far and 25 badly performing branches closed.

The plumbing and heating division saw total revenues fall 0.7% in the six months to 30 June, and like-for-like (LFL) sales down 2.9%.

But thanks to solid growth from the three other divisions, group revenues were 7.8% higher than the same period last year at £2.94bn, bang in line with expectations and up from 7.2% in the first quarter, with like-for-like sales up 5.7%, up from 5.1% in the first quarter.

Operating profits rose 9% to £182m before including profits from property sales, also in line with forecasts, with profit before tax climbing 3.1% to £167m and adjusted earnings per share up 1.5% to 54.2p.

"The group has delivered a strong underlying performance in the first half," said chief executive John Carter. "Our key strategic priorities are unchanged; modernising general merchanting, transforming Wickes and completing the plumbing & heating re-segmentation programme."

Management has not changed its full-year expectations for low double-digit profit growth and sales outperformance of its markets.

Carter added: "In support of these targets we have increased both capital and operational investment in our businesses to improve our customer propositions across range, availability and value, whilst allowing us to leverage the scale of the business."

The half year dividend was increased to 14.75p per share, up 20.4%, and reflected, the company said, the high level of confidence in the future growth prospects and cash generating ability of the business.