Travis Perkins, the builders merchant and parent to distribution specialist CCF, has revealed that revenue increased by 5.8%, with like-for-like sales up 3.1%, for the first half of 2016. Adjusted operating profit increased by 4.9% to £194m but it warns that Brexit has created significant uncertainty.
John Carter, Travis Perkins chief executive, said: “The solid performance in the first half of 2016 reflects our leading market positions, the hard work of our teams and the investments we have been making to improve all aspects of our business.
“It is clear that the result of the EU referendum has created significant uncertainty in the outlook for our end markets and we did experience weaker demand in the run up to and immediately following the referendum.
“Our two-year like-for-like sales in July have been below the levels we experienced in the second quarter, however we have seen a gradual improvement through the course of the 2 month.
“In our view it is too early to precisely predict end market demand and we will continue to monitor the lead indicators we track and will react accordingly.
“We have a proven track record of reacting swiftly to changes in market conditions, and the strength of the Group’s balance sheet, the competitive advantage we have created through the investments we have made and our ability to flex the cost base leaves us well positioned to continue to win market share and drive shareholder value over the medium term.” ”
Some major contracts are not going ahead as a result of the Brexit vote and the impact of the falling pound has been mitigated by currency hedging but some further price inflation is expected towards the end of the year.
The Contracts Division saw revenue growth of 3.0%. The six CCF branches opened at the end of 2015 performed well and in line with expectations. Faster growth of CCF and Keyline continued
to change the mix of business, lowering the overall divisional margin, whilst BSS continued
to experience more challenging market conditions. Operating profits declined by £1m in the
division owing to the conversion of profitable, mature Keyline branches, and the opening of
new CCF branches which have yet to make a significant contribution.