Travis Perkins (LON:TPK) Releases Quarterly Earnings Results

Travis Perkins (LON:TPK) posted its earnings results on Tuesday. The company reported GBX 15.10 EPS for the quarter, Digital Look Earnings reports. Travis Perkins had a negative return on equity of 9.35% and a negative net margin of 3.86%.

Here are the key takeaways from Travis Perkins’ conference call:

• Adjusted operating profit rose 6.3% to £67 million despite difficult trading conditions, supported by a 100-basis-point improvement in gross margin and cost reductions.
• The group strengthened its balance sheet, moving to £55 million of net cash before leases from £103 million of net debt a year earlier; leverage fell to 1.9x, within its 1.5x–2.0x target range.
• Management expects the challenging market backdrop to continue in the second half and is guiding to a trading performance similar to the first half, while continuing to pass through supplier price increases and avoid low-margin or high-credit-risk business.
• Travis Perkins reported progress in its general merchanting operations, including a mid- to high-single-digit profit improvement, while Toolstation UK plans to expand from roughly 590 to 650 locations and has surpassed 900,000 loyalty-club members.
• Residential new-build weakness, rising construction-company insolvencies, and deterioration at CCF remain significant risks; the group is also reviewing Toolstation Benelux, with discussions underway with potential third parties regarding its future ownership.

Travis Perkins Trading Up 19.5%

LON TPK opened at GBX 685 on Tuesday. The stock has a market cap of £1.45 billion, a PE ratio of -8.22, a PEG ratio of 6.44 and a beta of 1.28. Travis Perkins has a 12 month low of GBX 493.40 and a 12 month high of GBX 723.50. The company’s 50-day moving average price is GBX 550.64 and its 200-day moving average price is GBX 584.66. The company has a current ratio of 1.72, a quick ratio of 0.84 and a debt-to-equity ratio of 59.00.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on TPK shares. Peel Hunt reaffirmed a “buy” rating and set a GBX 660 price target on shares of Travis Perkins in a research note on Tuesday. JPMorgan Chase & Co. reduced their target price on shares of Travis Perkins from GBX 680 to GBX 630 and set an “overweight” rating on the stock in a report on Tuesday, May 19th. Berenberg Bank lowered their price target on shares of Travis Perkins from GBX 620 to GBX 580 and set a “hold” rating for the company in a report on Wednesday, July 8th. Finally, Jefferies Financial Group dropped their price target on Travis Perkins from GBX 507 to GBX 464 and set an “underperform” rating for the company in a research report on Monday, April 20th. Three investment analysts have rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus price target of GBX 616.80.

Travis Perkins Company Profile

Travis Perkins plc engages in distribution of building material products in the United Kingdom. It operates through Merchanting and Toolstation segments. The company offers tools and building supplies. It also distributes pipeline products, as well as supplies managed services, and commercial and industrial heating and cooling solutions. In addition, the company provides in specialist civils and drainage solutions; and air-conditioning and refrigeration products and heat pumps. Further, it provides insulation and interior building products to interior building specialists, contractors, and builders; and kitchens and joinery products.