Travis Perkins upgrades FY profit guidance, shares rally
Travis Perkins shares shot higher on Tuesday after the builders’ merchant upgraded its full-year profit guidance thanks to a strong performance in the second quarter.
The company said that after a robust star to the year, the high levels of growth seen in March have continued throughout the second quarter, driven by the strength in the domestic and commercial repairs, maintenance and improvement (RMI) markets.
As a result, it now expects adjusted operating profit for 2021 of at least £300m, "materially ahead" of market expectations of £259m, assuming there is no significant change in market conditions.
During April and May, the merchanting segment saw total sales growth of 6.3% compared to 2019. Toolstation UK continues to take market share with total sales year-to-date up 70.2% versus 2019, while Toolstation Europe continues to grow "strongly", with its performance ahead of management expectations.
Although the group cautioned over "well-documented" challenges on both inflation and materials supply on a number of core products ranges, it said its supply chain and network capabilities mean it is well placed to manage the circumstances.
Chief executive Nick Roberts said: "The ongoing strength of the group's trading performance through the second quarter remains underpinned by demand in both domestic and commercial RMI markets. Our merchanting businesses have recovered strongly while Toolstation's performance continues to be ahead of expectations.
"Whilst we are experiencing inflationary pressures across a number of product ranges, due to high demand and supply constraints, we are focused on working with both our suppliers and customers to ensure consistency of supply and fair outcomes for all."
At 1225 BST, the shares were up 4.7% at 1,693p.