Travis Perkins lifted by rebound at Wickes

Published on Wednesday 30 September 2009 21:53

BUILDERS' merchant Travis Perkins yesterday offered hope of trading recovery as demand for kitchens and bathrooms boosted sales at its Wickes DIY chain.

Like-for-like sales at Wickes jumped 7.8 per cent in the 13 weeks to the end of September as a major TV advertising campaign attracted shoppers to its revamped range.

Shares in the FTSE 250 company rallied more than 6 per cent as Travis added that overall trading in the past three months was ahead of forecasts.

The update sparked profit upgrades in the City and raised hopes the firm may resurrect its dividend.

Group turnover for the wider nine-month period to 26 September fell 11 per cent – an improvement on a 13 per cent drop during the first six months of the year.

However, the company indicated it remains cautious over any pick up and said its outlook for 2010 is unchanged amid uncertainty during the recession.

It said: "Volume relative to peak levels in early 2008 has yet to show signs of sustained improvement and pricing pressure remains with the rate of sales price inflation continuing to decline."

Total nine-month sales at Wickes rose 0.7 per cent with like-for-like sales up by the same amount. Like-for-like turnover at the company's merchanting division fell 16.3 per cent over the nine months, improving to a decline of 11.9 per cent in the third quarter as comparisons with last year eased.

Northampton-based Travis, which raised 300 million from investors in May, added that net debt continued to fall during its third quarter from 527m at 30 June.

Broker Numis hiked its pre-tax profits forecast for 2009 from 155m to 175m in response to news of a "very strong performance" at Wickes.

Howard Seymour, Numis analyst, called Travis "one of the best managed companies in the sector", and also upped his earnings outlook in 2010 from 158m to 182m and predicted the firm will resume dividend payments next year.

The company also announced today that it is appointing Robert Walker as its new chairman, with effect from next May.

Walker, currently chairman of retailer WH Smith and former chief executive of water firm Severn Trent, will succeed Tim Stevenson.