Northants-based builders’ merchant Travis Perkins says it has made good progress in difficult markets that it expects to weaken further.
The company, which supplies the construction and DiY markets, said group turnover at the end of April was up 6.8% on the same period in 2007.
Total turnover in its merchanting operation was up 8.2%, but like-for-like sales – which strip out the impact of additional trading space – was flat in march and April.
Speaking at the company’s annual meeting at its Harlestone Road, head office, chairman Tim Stevenson said and early Easter and slowing markets had affected merchanting trade.
Travis Perkins’ retail division, which includes Tile Giant and DiY chain Wickes, saw total trade in the 17 weeks to he end of April up by 3.3%.
This masked like-for-like sales down 3% at the Wickes chain, which it bought in 2004. Like for-like daily turnover in the last eight weeks was down 4.9%.
But Mr Stevenson said the retail division was making gains in terms of market share.
Travis Perkins has just refinanced the debt it took on with the purchase of Wickes.
Mr Stevenson said: “The new £1billion facility which has a duration of five years from April 2008, replaces the £900 million remaining of our existing facility and when taken together with $400 million previously raised through a US private placement provides sufficient resources to support continuation of the Group's strategy of network expansion.”
Travis Perkins now trades from 1,195 locations, having added 26 new merchanting outlets since the end of 2007, eight new Wickes stores and 36 Tile Giant stores.
But Mr Stevenson says market conditions mean the business has called a halt to further acquisitions.
He said: “Our recent experience shows that acquisition prices have not yet fallen sufficiently to reflect prevailing circumstances and we have therefore withdrawn from a number of acquisition possibilities.
“As a result, and without a significant upturn in market conditions, it is likely that our current rate of capital expenditure and acquisition spend will halve for the remainder of the year.”
He added: “As indicated in March, we expect our markets to weaken further as the year progresses.
“Recent lead indicators, particularly from the housing market, and on declining consumer confidence and disposable income, confirm this continued slowing of activity levels.
“In that context, with our resilient business model and increased banking facility, we are in a sound position to mitigate the cash and profit effect of a tougher trading environment.”
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