Northampton-based home improvement and builders’ merchant Travis Perkins Plc (LON:TPK) have seen their share price rally in morning trading on the back of improved on-year sales in Q1.
This news follows prior uncertainty with the departure of the company’s CEO last month and speculation that the company were planning to sell their struggling plumbing division.
Bumper start
The company said that sales were up 5.4% in Q1, with like-for-like sales rising 7.3% for the three months through March. Further, merchant like-for-like sales bounced 10.6% and there was even ‘good recovery’ in Wickes, which posted a 10.5% sales growth.
Despite a 4% fall in like-for-like sales in the plumbing and heating division, the company said that performance in other divisions meant it was on track to meet expectations for the full year.
Travis Perkins comments on the trade update
“We have delivered strong sales growth in the first quarter of the year, which reflects both our focus on excellent customer service and the weak comparator in 2018,” said chief executive John Carter.
“This performance is all the more encouraging given the impact of the on-going political uncertainty on our end markets.”
“In plumbing and heating the milder winter has impacted sales compared to 2018, but our branches and specialist online channels have continued to perform well.”
“The work to operationally separate plumbing and heating is progressing to plan and is expected to be completed in the second quarter.”
“We are making good progress on cost reduction activities and expect to meet our cost reduction targets this year.”
Portfolio considerations
The firm’s shares are currently trading up 30.5p or 2.17% at 1,434.5p per share 08/05/19 12:19 GMT.
‘Overall expectations for the group in 2019 remain unchanged.’
Analysts have struggled to find a consensus, with Peel Hunt reiterating its ‘Hold’ stance, Liberum reiterating its ‘Buy’ stance, UBS reiterating its ‘Neutral’ rating and Shore Capital analysts downgrading their rating from ‘Hold’ to ‘Sell’.
