Heating and Ventilating

Travis Perkins plc, one of the UK's leading builders' merchant and home improvement retailers, has issued a trading update for the six months from December 31 2009.
In its interim management statement in May, the company reported a strong rebound in trading following a slow start in the first two months of the year.

This trend continued through the remainder of the first half and TP expects to report a result for the six months to June 30 2010 ahead of management expectations.

Group revenue for the six months ended June 30 2010 was up by 4.7%, with like-for-like sales up 3.4%. Like-for-like turnover in the last two months is 10.3% ahead in Merchanting and in the last nine weeks is 1.6% ahead in Retail.

For the six months ended June 30 2010, Merchanting Division revenue increased by 6.1% including like-for-like growth of 5.3%, compared to the same period in 2009. The increase in like-for-like sales was split 4.5% for General Merchanting and 5.8% for Specialist Merchanting. Gross margins remained slightly lower than last year.

Revenue for our Retail Division, on a delivered basis, for the 26-week period ended June 30 2010, increased by 2.1%, with like-for-like sales declining by 0.4% compared with the same period in 2009.

Wickes continues to gain market share and maintained gross margins during this period. As previously indicated, the rate of market share gain will begin to abate through 2010 as Wickes'
new strategy in the kitchen and bathroom market begins to mature.

Given the pleasing trading performance in the first half the company now anticipates recommencing the payment of dividends although initially it will be basing this off a conservative level of cover. Unless there are an unforeseen circumstances, Travis Perkins expects to declare an interim dividend of 5p per share when it announces its interim results for the six months to June 30 2010 on July 29 2010.

The objective is to grow the dividend ahead of earnings to reduce the current level of cover over the medium term, said the statement.

'We are pleased with the overall progress the group has made in the first six months of the year,' said Geoff Cooper, chief executive.

'Current trading continues to be ahead of management expectations and we now have the onfidence to contemplate recommencing paying dividends. We expect to give an update on our discussions with The BSS Group shortly,' he added.