Travis Perkins pays dividend as market recovers

Grant Prior 12 years ago
Share

Directors at builders’ merchant Travis Perkins decided to restart paying dividends today as interim results highlighted a return to confidence in the market.

But the firm warned that “the market has only progressed from appalling in 2009 to miserable now” following the recession.

Private house building has led the recovery during the first six months of this year but bosses at Travis Perkins believe activity could tail off and are pinning their hopes of sustained growth on the repair and maintenance market.

For the six months to 30 June 2010 revenue, at £1,522.1m, was 4.7% up compared with the same period last year.

Group adjusted operating profits were up 2.4% to £120.4m, with adjusted profit before tax ahead by 23.7% to £111.8m.

The stronger than expected figures have led the Board to approve payment of an interim dividend of 5.0 pence per share.

The company said: “Significant uncertainties remain, and we expect any recovery to be uneven and gradual.

“Public sector new construction, which we estimate represents less than 10% of our revenue, is certain to come under considerable pressure – but with the full effect probably not emerging until the second half of next year.

“New house building, from which we estimate we now derive 17% of our revenue, is unlikely to continue the very strong rate of growth seen in this first half which was spurred on by house builders opening mothballed sites to re-build their inventories.

“Against these more volatile segments of our market, we expect to see a continuation of the gradual recovery in the more resilient repair, maintenance and improvement sector.

“The RMI sector, which we estimate represents some 70% of our revenue, is driven by a range of diverse factors, including consumer and corporate confidence, public sector budgets and activity in the secondary housing market.

“Whilst signals here are mixed, once again activity levels could remain low on an historic perspective, and yet still show significant improvement over 2009.

“Commercial and industrial markets, which represent less than 10% of our turnover, and have the greatest impact on our Specialist merchanting business, were relatively weak during the period.

“The depth of the trough in market activity experienced in 2009 leads us to conclude that we will see modest growth in the trade market in 2010.

“In 2011, we anticipate that a gradual recovery in private sector new build and RMI work will just offset the probable impact of public sector investments being scaled back to an affordable level and expect further modest growth.

“Whilst the course of the recovery may be uneven in the short term, underlying demand factors continue to suggest that we are at, or near, the bottom of the trough in construction activity.”

Latest news

M1 fraud probe reveals contract management problems

M1 J13-16 investigation finds £320,000 of central barrier scrap metal went ‘missing
19 mins ago

Green light for major overhaul of Surrey pharma campus

Kier and Mace in bidding revamp project with three storey glulam building at its heart
34 mins ago

Beaumont Morgan Developments goes into administration

Begbies Traynor now in charge of £47m turnover Manchester contractor
24 mins ago

Morgan Sindall hires Crossrail safety director

Carole Bardell-Wise joins infrastructure business as SHEQ Director.
33 mins ago

Roofer dies in six metre plunge through asbestos sheets

Court hears no safety nets were fitted on site
18 hours ago

Subbies stop working for Beaumont Morgan Developments

Manchester based contractor was delivering Fortis Quay for associate development company
1 day ago

Gove threatens ban on cladding suppliers failing to pay for retrofits

Cladding and insulation suppliers now in firing line for cash for £9bn post-Grenfell remediation bill
1 day ago

Bill for £22bn HS2 extension to Manchester goes to Parliament

52-mile extension of HS2 to Manchester via Manchester Airport will support 17,500 construction jobs
24 hours ago

Galliard scoops up trio of sites for schemes worth £265m

Sites in Redbridge, Ipswich and Milton Keynes to be developed
23 hours ago

Plans in for 350-flat Salford student scheme

Developer X1 hopes to start 15-storey building later this year
1 day ago

Green light for Birmingham Paradise landmark hotel

17-storey hotel will be the 'cornerstone' of Phase 2
4 days ago

Structural steel price jumps another £50 a tonne

British Steel blames New Year's price hike on continuing high product costs
4 days ago

Enabling works start at £400m Manchester First Street

Downing to start main construction in March of three resi buildings rising up to 45 storeys
4 days ago

Former BAM Nuttall chief to join Murphy

Adrian Savory to start new role as director of Major Projects division next month
4 days ago

Bouygues set for London Tustin Estate 700-home rebuild

Phased building programme to start towards the end of the year
4 days ago

Safety horror show on housing site leads to director ban

Court hears contractor ignored multiple prohibition and improvement notices
4 days ago

JV North calls up local firms for £250m new home works

Framework for home building projects worth up to £2m
4 days ago

Kier more than halves debts to below £200m

Kier chief reports steady progress in first six months of trading
5 days ago

Barhale boosts funds as it looks to rebuild turnover

Contractor confident as water companies ramp-up spending plans
5 days ago

HS2 labour agency looks to float on AIM

£23m turnover labour supply business looks to raise funds for expansion
5 days ago

Kane scores £29m M&E deal with Willmott Dixon

Off site works to play crucial role in major London estate contract
5 days ago

Graham secures third Audley retirement village

Work starts on Audley Villages site at Scarcroft, West Yorkshire.
5 days ago

Keltbray wins first deal for former nmcn infrastructure arm

Hull waste processing contract for rescued division
6 days ago

50 firms win £750m decarbonisation framework

Fusion21 framework to target 'whole building' works on homes and schools
6 days ago

Balfour Beatty UK construction MD to step down

Tom Edgcumbe to depart after just over a year as MD construction services in England and Wales
6 days ago

Crest Nicholson trebles cladding retrofit provisions to £43m

House builder revises building safety retrofit costs in face of new Government guidance
6 days ago

BAM bags £110m refurb of iconic Covent Garden tower

Landmark Seifert-designed 15-storey Space House to get two extra floors
7 days ago

Winvic to start UK’s largest speculative shed

Ellesmere Port warehouse understood to be worth around £80m
6 days ago

Kier signs deal for £169m Luton hospital revamp

Main construction work to start this month and last until 2024
6 days ago

Willmott Dixon nabs £30m Kirklees police HQ

Work to start within next few weeks on regional police HQ
6 days ago

Contractor services