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Travis Perkins, the FTSE 250 building materials supplier, said on Monday that it was on track to hit analysts’ expectations this year, despite disruption at building sites caused by heavy rain in the past two months.
Group revenue rose 4.4 per cent in the first four months of this year, beating analysts’ consensus forecast, although the sales growth was boosted by the acquisition in January of Toolstation, a smaller UK rival. The gross margin, stripping out synergies gained through acquisitions, was in line with the same period last year.
“We are pleased with the good progress in the first quarter, in particular the balance between continued [market] share gains and our achievements on gross margins,” said Geoff Cooper, chief executive.
Revenue in the company’s general and specialist merchanting divisions rose 6.1 per cent and 6.3 per cent respectively, while turnover fell 3.1 per cent in the plumbing and heating arm. Revenue in the consumer division increased 14.1 per cent, but this was largely because of the Toolstation acquisition, and like-for-like consumer sales declined 5.2 per cent.
The company said it still expected to save £30m this year from synergies achieved through the £558m acquisition in 2010 of BSS, a plumbing and heating specialist.
Travis Perkins has performed solidly amid a weak construction market in the past four years, but Mr Cooper came under fire last year as 40 per cent of shareholders rejected his proposed 20 per cent pay increase.
However, Monday’s trading update showed that Travis Perkins remained “a sensible company doing sensible things”, said Mark Howson, an analyst at Oriel Securities.
Although the unchanged gross margin was “a tad disappointing” compared with his anticipation of a slight improvement, Mr Howson said the revenue increase had beaten expectations.
The company said its outlook for the year remained unchanged. At its annual results statement in February, it said markets would “remain subdued in 2012”. It predicted a slight decline in trade market volumes due to lower levels of housing sales and public spending, and a larger fall in the consumer market due to pressure on disposable income and rising unemployment.
The shares fell 1.6 per cent to 976.5p.