Travis Perkins lifts pre-tax profit to £260m

Travis Perkins, the builders’ merchant and DIY retailer, has unveiled a pre-tax profit for 2007 running to £260m, representing an increase of £30m over the £230m profit in the previous year.

Turnover was higher at £3.2bn (comparable figure in previous year: £2.8bn).

TP has two main segments and the turnover of each is:

• £2.0bn – builders’ merchanting
• £850m - DIY retailing 

The trade division saw a 13% growth in sales, with new branch openings contributing 4% of this, the balance coming from a 9% rise in like-for-like sales in existing branches.

Geoff Cooper, chief executive, said that TP accelerated its branch opening programme in 2007. “In addition to the gross 75 branches we added to our existing brands, we entered a new market via the acquisition of Tile Giant, further implementing our strategy of entering adjacent channels for the distribution of building materials.”

TP’s latest annual results cover the 12 months to 31 December 2007.

Cooper said that the 13% growth in trade sales was 2% ahead of market growth rates with market share gains “coming equally from national competitors and independent merchant competitors”.

The split of operating profits, before total net finance costs of £59m, was:

• £260m - builders’ merchanting
• £60m – DIY retailing

A quick run through the various brands within TP’s builders’ merchanting side shows:

• Travis Perkins – added 22 net sites and was trading from 581 sites by the year-end. Brownfield sites accounted for 44% of new sites. They offer attractive returns compared with acquisitions.
• Keyline – the heavyside merchant added three branches to its network, finishing the year with a total of 79. For the past two years there has been a push to offer more items for major civil engineering customers
• City Plumbing Supplies – continued its steady recovery from trading difficulties in 2005
• CCF – the dry-lining ceilings and insulation specialist has expanded to 34 branches
• Benchmarx – the specialist kitchen and joinery business jumped from six branches to 25
• Tile Giant – bought in November with founder and managing director Mo Iqbal has stayed on as leader. Today, TP announced that it has bought Tile Magic, a 17-branch chain operating in London and the south east.

Rationalisation of suppliers ploughs on, the result being that in 2007 the top 25 suppliers account for 47% of cost of all goods sold by TP.

TP’s global sourcing programme seeks to establish “a direct line of supply with producers in low-cost economies for products where branding is not a key purchasing criteria for our customers.”