Travis Perkins share price: First-quarter trading in line with expectations

Travis Perkins (LON:TPK) has updated investors on its first-quarter performance this morning, reporting that trading during the period was in line with expectations.

**Highlights from the company statement:**
Total Group sales grew by 5.0% in the first quarter and 6.2% on a comparable days basis. Like-for-like sales growth was 4.2%. Price inflation was negligible, with low inflation on heavyside categories broadly offset by continued deflation on lightside categories and commodity driven products. There was a negative impact of (1.2)% on Group sales owing to one fewer trading days in the period for General Merchanting, Plumbing & Heating and Contracts.

In January, 13 Keyline branches were converted to the Travis Perkins brand where the branch location and local customer base is better suited to the product and service of a general builders merchant. This switch negatively impacted total sales in the Contracts division by (2.2)%, with a corresponding 1.4% increase in General Merchanting. The expansion of the branch network continued, with five additional Benchmarx showrooms and nine Toolstation stores opened in the first quarter of 2016.
General Merchanting like-for-like sales grew by 4.7% with particularly encouraging growth in heavyside categories and timber, supported by the range centre network, and continued growth in Benchmarx.
Plumbing & Heating experienced a more settled period of trading in Q1 2016 following the sales disruption caused by the restructuring programme in 2015. Like-for-like sales growth of 2.2% was a mix of encouraging growth in City Plumbing and broadly flat sales in PTS. Total sales performance of the rebranded City Plumbing branches was in line with expectations and gives confidence in the future progression of the division.
Like-for-like sales growth in the Contracts division was 2.1%, ahead of the growth in Q4 2015 and against a very strong 2015 comparator, with two-year like-for-like growth of 17.5%. Like-for-like growth was balanced across all businesses in the division. The eight additional CCF branches opened in 2015 added to total sales in the Contracts division, but also diluted like-for-like sales growth as some existing business migrated to the new depots from existing sites.
Positive momentum continued in the Consumer division with like-for-like growth of 7.3%. Q1 sales growth has been adjusted to compare the first 14 weeks of 2016 against the comparable period, including Easter, in 2015. Like-for-like sales growth was particularly pleasing given the early timing of Easter this year. Wickes continued to invest in value, and further improved ranges and customer service. Good like-for-like sales growth continued in both Toolstation and Tile Giant as both businesses grew market share.
John Carter, Chief Executive, commented:
“All of our businesses demonstrated good growth in the first quarter of 2016, driven by the recovery in the RMI market and by the investments we have made to improve our customer propositions as part of our five-year plan.
The modernisation of General Merchanting continued with a clear focus on driving the maturity of the heavyside range centre network, improving customer access to broader ranges and better stock availability. The physical aspect of the restructuring of the Plumbing & Heating division has been successfully completed; the priority is now to take full advantage of the customer focused businesses that have been created. Growth in the Contracts division moderated, against strong comparators in 2015, but there remains significant opportunity to continue to take further share in these markets. The Consumer division maintained the strong momentum established in 2015, with excellent like-for-like growth.
Our three priorities remain unchanged; the modernisation of Travis Perkins, the transformation of Wickes, and improving the performance of the restructured Plumbing & Heating division.”
As of 07:10 BST, Wednesday, 20 April, Travis Perkins plc share price is 1,824.00p.