Travis Perkins resumes payouts as swings to interim profit

(Alliance News) - Travis Perkins PLC on Tuesday reinstated its payout following a lucrative and ...

Alliance News 3 August, 2021 | 9:07AM
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(Alliance News) - Travis Perkins PLC on Tuesday reinstated its payout following a lucrative and busy first half which has seen the builders' merchant demerge its Wickes arm and sell its plumbing and heating unit.

The FTSE 250 company will return proceeds from the unit sale to shareholders in the form of a special payout and a buyback, it said on Tuesday. It also declared its first ordinary payout since suspending dividends in March of last year.

Travis Perkins has benefitted from boosted demand for home improvements. Revenue in the six months to June 30 rose 38% to GBP2.30 billion from GBP1.67 billion a year earlier.

Travis Perkins swung to a pretax profit of GBP145.7 million from a GBP94.5 million loss.

The company added its Toolstation arm, which sells building materials and a range of trade tools, has continued to see market share gains.

"I am delighted with our performance during the first half of 2021. To have executed our planned strategic portfolio actions whilst delivering an excellent trading performance in ever changing market conditions is testament to the hard work and capability of our colleagues across the group," Chief Executive Officer Nick Roberts said.

Travis Perkins sold its plumbing and heating distribution unit to HIG Capital will buy the unit for GBP325 million. It also completed the demerger of its DIY retailing business, with Wickes Group PLC.

Travis Perkins declared a 12.0 pence per share interim payout, its first since suspending dividends in March 2020.

The company explained: "Given the strong performance in the first half of 2021 and the strength of the group's balance sheet, the board believes that now is the appropriate time to reinstate dividends, distributing between 30% and 40% of full year adjusted earnings as a regular dividend."

It also plans to distribute proceeds from the sale of its plumbing and heating business in the form of a 35p per share special dividend and a share buyback.

Looking ahead, Travis Perkins now expects adjusted operating profit of at least GBP310 million for 2021, up 37% from GBP227 million in 2020. Its previous guidance was for adjusted operating profit of GBP300 million.

The guidance boost reflects "additional property profits" from its disposal programme.

First half adjusted operating profit surged to GBP164 million from GBP17 million.

Travis Perkins shares were 1.1% lower at 1,702.50p each in London on Tuesday morning.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Travis Perkins PLC 718.00 GBX 0.42 -
Wickes Group PLC 152.40 GBX 0.13 -

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