4th August 2015
As Travis Perkins reports its interim results, Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…
Travis Perkins, the UK’s leading supplier of building materials, reported a healthy set of interim results this morning. The group, which includes Wickes, has been benefitting from the boom in the UK’s housing market, more repair and maintenance, better weather, and Government support for more housing. Adjusted profits rose by 3.1% to £167 million whilst there was a healthy 20% increase in the dividend to 14.75 pence. Year to date, the shares are up by around 20%.
Interested investors should note that Travis Perkins is close to halfway through a strategic plan which aims to optimise space, improve customer options, leveraging scale and improve management of the business, especially with regard to cost control and margins. Those currently invested should note the CEO stated that they remain on track for full year results and expect to meet expectations.
The share price has once again been heading in the right direction since November. They now trade on a forward P/E of around 15 and a prospective 2.5% dividend yield. This may tempt longer term investors who are bullish on construction and the housing market and are prepared to back management’s ambitious strategic plan.
The Share Centre recommends Travis Perkins as a ‘buy’ for medium risk investors looking for a balanced return.