Travis Perkins plc

Group revenue was GBP 2.258 billion, down 1.8% year over year; like-for-like turnover fell 0.7%. Adjusted operating profit before property profits was GBP 62 million, or GBP 67 million including property profits, up 6.3% year over year. Adjusted EPS was 15.1p, up 13.5%, and gross margin improved by 100 basis points. Net cash before leases was GBP 55 million versus GBP 103 million a year ago, and leverage declined to 1.9x from 2.0x at year-end and 2.3x a year ago. Guidance: 28% effective tax rate on UK profits, base capex of GBP 60 million to GBP 70 million, property profits of around GBP 5 million for the full year, and a similar trading performance in H2 versus H1.

Gavin Slark emphasized that Travis Perkins is becoming a more disciplined, better-structured business, with gross margin expansion, tighter procurement, and more selective pricing at the center of the strategy. He described the group as having a stronger balance sheet and said the leadership team is aligned around improving operational efficiency, productivity, and self-help across the businesses. His tone was upbeat but pragmatic, repeatedly noting that the market remains difficult even as the company sees room to take share and improve returns.

Duncan Cooper focused on the numbers: revenue of GBP 2.3 billion, adjusted operating profit of GBP 62 million before property profits and GBP 67 million including them, adjusted EPS of 15.1p, and net cash of GBP 55 million. He said leverage fell to 1.9x, back within the company’s desired 1.5x to 2.0x range, and the board is recommending a 4p interim dividend payable on 6 November. On costs and cash, he said the group expects around GBP 40 million of cost inflation this year, has made further working-capital progress, and now wants capex kept lower and more targeted, with base capex guided to GBP 60 million to GBP 70 million.

Analysts pressed management on pricing, rebate structures, procurement savings, working capital, balance-sheet use, branch-network rationalization, and whether gross margin gains could reverse. Management said manufacturer price increases had stabilized recently, though more could come through, and that the company is passing them on more consistently than before; on rebates, Duncan said there has been a gradual drift into COGS over time but nothing dramatic. They also said procurement is a real opportunity but declined to quantify it, working capital should improve further in H2, and Benelux discussions are active and well advanced but not on a disclosed timetable.