Travis Perkins announced its Q1 trading update on Friday where the group said its recorded an encouraging first quarter which reflects the group’s strategic progress and voiced its concerns regarding material inflation resulting in an uncertain outlook for 2022.

Travis Perkins reported total sales for the first quarter of 2022 were 13.6% higher than in 2021, indicating a solid start to the year for the group.

Total sales increased 17.9% in the Merchanting area, with all businesses functioning in line with expectations, owing almost two-thirds of the rise to pricing as manufacturers continued the raises which will be passed through promptly.

The queue of social and economic infrastructure development, as well as the continued need for additional homes, continue to support strong customer demand across all end markets for Travis Perkins.

SME customers’ order books are still solid, with a growing interest in energy efficiency projects says the group.

Travis Perkins’ Toolstation total sales fell 6.0% in the first quarter, with LFL sales falling 11.9%, reflecting a difficult prior-year comparator and the return of Toolstation’s customer mix to its core trade base, which continues to realise the importance and convenience of the customer proposition.

As the comparison period passes the elimination of pandemic limitations leaves management to be hopeful that business drivers will normalise in the second half of the year.

By the end of 2021, the construction supply chain had mostly normalised, and while the crisis in Ukraine and its influence on the global economy may threaten that relative stability, the group’s stock levels remain robust.

The group’s outlook for materials price inflation, which was previously projected to moderate towards the second half of the year, is now more uncertain, with pricing likely to account for a larger share of sales growth throughout the year than previously anticipated.

Overall, Travis Perkins’ cost inflation is expected to be moderate.

Despite the current uncertain financial and geopolitical environment, order books in the construction industry in the United Kingdom remain strong.

Management’s full-year projections remain unchanged, owing to Travis Perkins’ stable end markets and trade-focused business strategy.

Nick Roberts, Chief Executive Officer, Travis Perkins, 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.”

Travis Perkins shares dropped 1.4% to 1,249p on Friday despite the group stating that the start of 2022 was encouraging in its Q1 trading update.

Computacenter shares dipped 4.2% to 2,623p despite the company announcing that its top-line grew strongly in the first quarter of 2022 on Friday.

Computacenter saw its top line grow strongly in the first quarter of 2022, as planned, but adjusted profit before tax grew more modestly, owing to one extremely large volume customer diluting our overall margin.

Furthermore, the significant elimination of lockdown measures in the areas where the group operates has resulted in a return to a more normal, and more sustainable, cost base post-COVID-19.

As Computacenter reported at the time of its final results, H1 2021 presented a more difficult comparison than the entire year, so being profitable ahead of 2021 after the first quarter is encouraging.

Computacenter Outlook

Although adjusted profit before tax at the end of H1 2022 will likely be lower than in 2021, Computacenter will still be operating in line with its business’s historical seasonality, giving the group confidence for the entire year even though much work remains to be done.

The group is optimistic that FY 2022 will be a year of continued improvement and Computacenter is currently on target for the entire year.

There are certainly numerous issues in the world, and the business, like most firms, is affected by wage inflation and supply chain limitations. However, these challenges provide Computacenter with the opportunity to differentiate itself from the competitors by providing superior execution.

The momentum that Computacenter has developed over many years, as well as the solidity of its balance sheet, invoked confidence in the group’s future and the group said its next scheduled trading update is its Interim Results, which will release on 9 September 2022.

Pearson continued the momentum with underlying sales growth of 7% in the first quarter of 2022 and acquired Mondly in English Language Learning said the group on Friday.

Pearson reported an underlying sales growth of 7% in the first quarter of 2022 with Sales of Assessment & Qualifications contributing 22%.

The group’s Sales of Assessments & Qualifications increased by 22% across the board. The outstanding performance of the US Student Assessment can be attributed in part to the normalisation of exam schedules and Clinical Assessment performed admirably, thanks to the phasing of orders.

Pearson enjoyed a strong retention rate in Virtual Schools and growth in OPM helped boost Virtual Learning sales by 3%, where the OPM contract with ASU will expire in June 2023, as revealed on April 19th.

Borders re-opening and improved worldwide mobility boosted English Language Learning revenues by 18% in Q1, with growth in Pearson Test of English volumes weighted to Q1.

Higher Education revenues fell 5% due to predicted declines in US higher education, indicating a continuous decline in enrolments and courses per enrolment for the academic year 2021/22.

Pearson’s GED Testing Service was chosen as an education partner for Amazon’s Career Choice initiative, indicating that the company has made significant strategic development.

Sales of Workforce Skills increased by 9% excluding acquisitions, owing to continued growth in BTEC, GED, and TalentLens for Pearson, and as projected, sales in enterprises undergoing strategic review dropped 11%.

The group also reported a share buyback programme to return £350m to shareholders and stated that the first tranche commenced in April, of which over £75m had already been completed.

Pearson reaffirmed its guidance for adjusted operating profit in 2022.

Pearson acquires Mondly

Pearson announced the acquisition of Mondly, which was a strategic purchase for the English Language Learning division, today.

The acquisition is another step forward in the digital strategy, providing the group with access to the rapidly expanding direct to consumer English language learning sector.

Institutional, Pearson Test of English, and Workforce Skills are all strategic growth areas for Pearson, with synergies and cross-selling opportunities.

Pearson expects mid-teens margins for the division by 2025.

Andy Bird, Chief Executive Officer, Pearson said, “Pearson has continued to make strong strategic, operational and financial progress through the first quarter. Underlying sales grew by 7%, and we remain on track to deliver on our 2022 financial expectations and medium-term guidance.” 

“Our acquisition of Mondly, one of the world’s leading online language learning platforms, is another exciting strategic development. It strengthens Pearson’s direct to consumer strategy and supports our ambition to become the global leader in English language learning for committed learners.” 

“We remain sharply focused on the successful execution of our strategy and we are encouraged by the momentum we are seeing across the business.”

Pearson shares gained 2.6% to 791p on Friday after the group reported its Q1 trading update.

Simec Atlantis Energy (SAE) announced on Thursday that its Uskmouth site is transitioning into a sustainable energy park, leading the group’s shares to soar 15% to 2.65p.

SAE said that the Uskmouth site’s transformation into a sustainable energy park includes plans to provide a Battery Energy Storage System as a first step (BESS).

The Uskmouth site has a 230MW grid connection, as well as extensive land and infrastructure, making it an ideal location for the construction of a large-scale, commercially appealing BESS project.

BESS integration into transmission and distribution networks is widely acknowledged as a significant enabler of increased and faster integration of intermittent renewable energy into the UK electricity supply.

SAE has progressed the BESS development process by submitting a Modification Application to National Grid, requesting that the Uskmouth site’s connection agreement be changed to accommodate a BESS plant.

SAE has also filed a screening report to Newport City Council for the development of a 230MW BESS facility on the former coal stockyard and is working with an industry-leading partner to expedite the battery storage facility’s delivery.

SAE is no longer pursuing the previously stated plans for the Uskmouth Conversion Project due to the establishment of a BESS at the Uskmouth site and has notified Welsh Government and relevant stakeholders that it would be withdrawing the permission variation application.

SAE has entered into a deal to sell some parts of the plant that are no longer needed for the site’s future ambitions as a result of this decision.

Wye Valley Demolition, a local company, has been given £1.2m contracts to remove the redundant plant and equipment.

This deal provides immediate funding to SAE’s business, assisting in the achievement of SAE’s broader goals and providing value to shareholders.

While SAE will not move through with the Uskmouth Conversion Project, the need to repurpose coal-fired power plants has never been greater to decrease emissions, improve energy security, and reduce waste shipped to landfills and polluting our oceans.

Governments throughout the world are looking for projects that can provide energy security and independence rapidly, and our coal plant conversions can provide a speedy and cost-effective solution.

SAE is committed to expediting the transition of existing coal-fired power plants to lower-emissions fuels and is working with its partners to transfer key lessons learned to other nations where they may have the most impact.

Graham Reid, CEO of SAE commented, “The team and I are tremendously excited about this next step for the Uskmouth site, which will help deliver the UK’s net zero targets, release important value for the business and allow the team to build on the lessons learnt to help countries around the world to achieve the targets of reducing reliance on coal, increasing energy security, and finding long term solutions to the growing waste problem.”