Shares in builders’ merchant Travis Perkins (TPK) climbed 3.3% to a new 12-month high of £16.97 after the firm posted a first quarter trading update showing strong growth in sales not just on the same period last year but also on the previous year, which provides a clearer comparison.
Like-for-like revenues for the group, excluding the Wickes retail arm, increased by 17.4% on the first quarter of 2020 and 11.8% on the first quarter of 2019, which demonstrates the underlying strength of the UK repair, maintenance and improvement market.
The Toolstation equipment-hire business saw even more marked growth, with like-for-like turnover up 42% in the first quarter, an acceleration from previous quarters. The business is on track to open a further 60 branches in the UK, while plans are afoot to expand in Europe.
While January and February continued the positive trend of the fourth quarter, the firm said in March it saw ‘a marked step-up in activity with pent-up demand and continued high levels of housing transactions fueling higher RMI spend’.
Meanwhile, the demerger of Wickes to Travis shareholders is almost complete and the shares will begin trading on 28 April. The business itself experienced strong demand in the quarter, with sales up nearly 20% on last year and more than 25% higher than two years earlier driven by its Click & Collect service, auguring well for the listing.
Major investors in Travis – and by extension Wickes – are BlackRock, Investec Asset Management, Ninety One UK, Harris Associates, Oppenheimer Funds and Sanderson Asset Management, which all hold roughly 5% of the shares.
Chief executive Nick Roberts described the group's first quarter as ‘an encouraging start to the year with robust like-for-like sales growth across our businesses, underpinned by strong demand in the RMI market’.
However, he resisted the temptation to raise forecasts: ‘At this early stage in the year, our expectations remain unchanged as we continue to make progress on the delivery of our longer-term strategic plans.’