Travis Perkins upbeat and ready to pay dividends

NORTHAMPTON: Travis Perkins forecast first-half results ahead of expectations and said it planned to recommence paying dividends.

The firm, which said last month it wanted to buy plumbing and heating company BSS Group for £553m, said today revenue for the six months to June 30 increased 4.7% with sales at stores open over a year up 3.4%.

Geoff Cooper, chief executive, said: "We are pleased with the overall progress the group has made in the first six months of the year. Current trading continues to be ahead of management expectations and we now have the confidence to contemplate recommencing paying dividends. We expect to give an update on our discussions with The BSS Group shortly."

"In the absence of unforeseen circumstances we expect to declare an interim dividend of 5-pence per share when we announce our interim results on 29 July," the company said. Shares in Travis Perkins closed on Thursday at 733 pence, valuing the business at £1.53bn.

Travis Perkins said in today's trading statement: "In May, we reported a strong rebound in trading following a slow start in the first two months of the year. This trend has continued through the remainder of the first half and we now expect to report a result for the six months to 30 June 2010 ahead of management expectations,"

For the six months ended 30 June 2010, merchanting division revenue increased by 6.1% including like-for-like growth of 5.3%, compared to the same period in 2009. The increase in like-for-like sales was split 4.5% for general merchanting and 5.8% for specialist merchanting. Gross margins remained slightly lower than last year.

Revenue for the retail division, on a delivered basis, for the 26-week period ended 30 June 2010, increased by 2.1%, with like-for-like sales declining by 0.4% compared to the same period in 2009.

Wickes continues to gain market share and maintained gross margins over this period. "As previously indicated, the rate of market share gain will begin to abate through 2010 as Wickes' new strategy in the kitchen and bathroom market begins to mature," the compny said.