Travis Perkins to beat profit guidance as surge in demand continues

Builders’ merchants Travis Perkins has said it expects to post profits “materially ahead” of expectations for 2021 after shaking off cost rises and supply issues.

Shares in the company, which spun-off its Wickes retail arm earlier this year, jumped after it released the trading update.

Travis Perkins said “high levels of growth” seen in March continued into the second quarter 2021 as DIY and commercial repairs operations remained strong.

It told investors that is expects to deliver adjusted operating profits of “at least £300 million” for its continuing business in 2021.

A consensus of analysts had previously forecast profits of around £260 million for the period.

Travis Perkins said merchanting sales for April and May were 6.3% ahead of pre-pandemic levels from the same period in 2019.

Meanwhile, its Toolstation UK business said total sales were up 70.2% in 2021 so far, compared with the same period in 2019.

The group said that the surge in demand has resulted in “well-documented challenges on both inflation and materials supply on a number of core products ranges”.

However, it added that its supply chain and network has allowed it manage these by working closely with suppliers and customers.

Nick Roberts, chief executive of the company, said the “ongoing strength” of its performance in the latest quarter was driven by demand in both retail and commercial markets.

He said: “Our merchanting businesses have recovered strongly while Toolstation’s performance continues to be ahead of expectations.

“Whilst we are experiencing inflationary pressures across a number of product ranges, due to high demand and supply constraints, we are focused on working with both our suppliers and customers to ensure consistency of supply and fair outcomes for all.”

Shares were 6.2% higher at 1,716.5p after the announcement.