Travis Perkins Group’s encouraging Q1 reflects ‘strategic progress’

Travis Perkins Group has reported a positive start of the year with financial performance for the group as a whole 13.6% ahead of 2021.

In its most recent update, the group says total sales were up by 17.9% in the merchanting segment, with all businesses performing in line with expectations. This was largely down to pricing, which accounted for two thirds of the growth with manufacturer increases “continuing to be passed through in an orderly manner.”

The group owns Benchmarx, Keyline, CCF, BSS, and Toolstation, the latter reporting total sales down 6.0% in the first quarter. Toolstation’s like-for-like sales were also down (11.9%), reflecting a tough prior year due to pandemic restrictions, which the group’s management says it’s confident will normalise into the second half of the year.

Despite the group’s construction supply chain normalising towards the end of 2021, the firm admits the war in Ukraine and the subsequent impact on the global economy may challenge that relative stability, although the group’s stock levels remain healthy.

The group’s forecast for materials price inflation, which was originally expected to ease into the second half of the year, is now more uncertain. The group believes pricing likely to form a higher proportion of sales growth across the year than previously thought.

The overall cost inflation for the group is expected to remain manageable.

Nick Roberts, chief executive, commented: “The group has had an encouraging first quarter and, although the wider economic backdrop remains uncertain, we are well placed to build on this positive start in the coming months.

“The energy efficiency of the UK’s built environment remains a key focal point for households and politicians alike and the current cost of energy is likely to prompt further demand for improvement in both new and existing buildings. Allied to the significant pipeline of investment in the UK’s social and economic infrastructure, we remain confident in the structural drivers of demand in our end markets.

“As the UK’s largest building materials supplier and a leading partner to the construction industry, we are uniquely placed to support the country in this drive and are working closely with all key stakeholders, including government, housebuilders, tradespeople and developers, to address these challenges.”

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