Travis Perkins Plc is a supplier of related products to the building, construction and home improvement markets. It supplies a wide variety of products such as building materials, interior design materials, ceramic tiles, plumbing and heating equipment, power tools, kitchens and joinery products, ventilation and air conditioning, renewable energy systems, and spare parts. It also provides services such as pipeline, plumbing contracts, heating and mechanical services, repair, and maintenance.
On May 08, 2019, the company reported its trading updates for the first quarter of FY19. Despite ongoing uncertainties within the UK market, the group made a positive start to 2019 with like-for-like sales during the quarter surged by 7.3 per cent and registered a total sales growth of 5.4 per cent against the comparing period of the previous financial year.
However, on a like-for-like basis, sales of Merchanting business grew by 10.6 per cent, Toolstation reported a growth of 19.1 per cent, Retail grew by 10.0 per cent, and Plumbing & Heating reported a contraction of 4 per cent.
Businesses within the Merchanting reported good growth. Travis Perkins witnessed improving trend against the FY18 and growth in the first quarter was primarily driven by big regional and national customers and through managed business services as well.
However, due to milder weather conditions during the first quarter as compared to the corresponding period of the previous financial year, the plumbing and heating segment reported a weak sales growth during the first quarter of FY19.
As per the management estimates, the specialist merchant business will continue to perform stronger, although the ongoing political uncertainties could create some hurdles for the commercial construction and housebuilding markets.
The operation separation of the Plumbing and Heating business is expected to be completed by the end of the second quarter of the present financial year. The group is on track to achieve the target plan to reduce the production cost in 2019.
Stock Performance – 1 Year
At the time of writing (as on May 09, 2019 at 10:40 AM GMT), the shares of TPK were quoting at GBX 1,434.50 and declined by 15.5 points or 1.06 per cent against the previous day closing price.
During the past one year, the stock has registered a 52w high of GBX 1,489.0, and a 52w low of GBX 964.75 and at the current trading levels, shares were trading around 49 per cent above the 52w low price level.
Shares were trading considerably above the 200-day simple moving average price level, which is a favourable technical indicator for stock and carrying the potential to move up further from the current trading levels.
On a year-to-date basis, the stock has delivered a price return of around 30 per cent. The total outstanding market capitalisation of the group stood at £3.52 bn, and the dividend yield of the company stood at 3.35 per cent respectively.