Travis Perkins H1 profits drop amid challenging plumbing & heating market

In the six months to the end of June, adjusted pre-tax profit was down 4.5% to £175m even as revenue rose 3.5% to £3.2bn, as adjusted operating profit in the plumbing and heating division declined 32% to £13m.

Travis Perkins said the markets served by the plumbing and heating business continued to be “particularly challenging”. In the contract channel, growth with housebuilders was not sufficient to offset the reduction in volumes in social housing and reduced trade with one of its largest customers.

Chief executive officer John Carter said: “We executed our plan well and delivered a solid overall performance in the first half of 2017 against a challenging market backdrop of pronounced input cost inflation and market volatility. The robust growth and outperformance in our Contracts and Consumer divisions build on strong customer propositions and successful investments in those businesses.

“In the first half of the year, the group made a conscious decision to recover input cost inflation selectively through disciplined pricing activity. Whilst this had some impact on trading volume, it enabled us to maintain group gross margins and positions the business well for the future.”

The company announced a “comprehensive transformation plan” in its plumbing and heating division, designed to stabilise performance and create more options to maximise shareholder value.

“Whilst we remain cautious on the macro-economic outlook for the second half, the group remains focused on executing the clear plans it has in place which will deliver strong cash generation and maximise returns,” Carter said.