Travis Perkins’ adjusted operating profit slides 81% in fiscal H1
- Travis Perkins’ adjusted operating profit slides 81% in fiscal H1.
- The British builders' merchant reports £2.78 billion of revenue.
- Travis Perkins did not declare an interim dividend on Tuesday.
In an announcement on Tuesday, Travis Perkins plc (LON: TPK) revealed to have swung to a loss in the first six months of the current fiscal year. The company attributed its loss to COVID-19 related lockdowns but expressed confidence that performance will improve in the upcoming months.
Shares of the company were reported about 4% down in pre-market trading on Tuesday. The stock continued the decline and tanked another 4% on market open. Including the price action, Travis Perkins is now exchanging hands at £11.23 per share versus a much higher £16.27 per share at the start of the year. In comparison, the stock had plummeted to a year to date low of £6.5 per share in March. Learn more about why prices rise and fall in the stock market.
Travis Perkins reports £2.78 billion of revenue
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At £126.5 million, the builders’ merchant said that its pre-tax loss in fiscal H1 was significantly weaker than £15.5 million of profit it recorded in the same period last year. Its adjusted operating profit, on the other hand, came in at £42 million that represents a massive 81% decline on a year over year basis. In separate news from the UK, Royal Mail raised its target for annual revenue on Tuesday.
The owner of the Wickes home improvement chain also reported £2.78 billion of revenue versus the year-ago figure of £3.48 billion. The revenue matched what the company had predicted earlier this year in July. Travis Perkins used e-commerce to clear £30 million of dead stock.
Travis Perkins did not declare an interim dividend
Owing to the Coronavirus uncertainty, however, the company’s board chose not to declare an interim dividend to shore up finances amidst the health crisis. Travis also suspended its final dividend of 33 pence a share earlier in 2020. The retailer is considering demerging Wickes, but the plan is on hold until markets become more predictable.
In its previous announcement, Travis Perkins said it will close 165 of its estate-wide branches this year that will slash its workforce by 9%, or will result in a loss of roughly 2,500 jobs. Its ongoing restructuring, as per the FTSE 250 listed firm, will result in £120 million of savings on an annualised basis.
At the time of writing, the Northampton-based builders’ merchant has a market cap of £2.83 billion and has a price to earnings ratio of 23.17.