Builders' merchant Travis Perkins (TPK) has produced a solid set of full-year results in a difficult market, yet weak consumer sales have got analysts worried about a quoted rival. B&Q-owner Kingfisher (KGF) is due to publish fourth quarter figures soon and stockbroker Cantor Fitzgerald reckons its UK and French figures could be worse than expected, given Travis Perkins' results.

Travis Perkins owns Wickes, the third-largest DIY operator after B&Q and Homebase. It has reported a 7.6% drop in like-for-like sales for its consumer division, which is predominantly Wickes, for the first seven weeks of 2013.

Kingfisher will publish its fourth quarter trading update tomorrow (21 Feb), covering the three months to the end of January. Cantor expects 3% like-for-like sales decline for B&Q; 3% drop for Brico Depot and 1.5% decline for Castorama, the latter two having a strong presence in France.

Cantor analyst Freddie George, who has a 'sell' rating on Kingfisher, says: 'The UK and the French figures may well be worse than our forecasts given the Travis Perkins data this morning and the Banque de France January update last week suggests a weak final quarter. We are, however, not revising our forecasts because any shortfall in the UK and French numbers is likely to be offset by a recovery in the euro over the last month.'

Travis Perkins fell 1.6% to £12.87 after the publication of its results, albeit there is likely to be a large element of profit taking. Prior to today, shares in the £3.1 billion cap had risen 42% since June 2012.

The results were in line with expectations with 1.1% growth in adjusted pre-tax profit to £299.9 million. Shareholders have been rewarded with a 25% higher dividend at 25p.

Panmure Gordon analyst Andy Brown has a 'buy' rating on Travis Perkins with a £13.50 price target. He says: 'With an attractive valuation and decent prospects across its operations, we stay positive on Travis Perkins for the medium term. Management has a strong record on tight cost control, essential in the current climate and it continues to deliver best in class margins. The share price has responded well of late which may limit immediate upside following these results.'

Kingfisher nudged up 0.3% to 276.1p on the back of Travis Perkins' results.

Issue Date: 20 Feb 2013