CCF star performer as Travis Perkins profits fall
Travis Perkins plc, the builders merchant and distribution giant, has report a 5% fall in profits for the first half of 2017 as it suffered from weakening housing transactions and consumer confidence, as well as cost inflation. Despite the difficult market background, the Consumer and Contracts divisions, led by CCF, delivered above market revenue growth.
Group revenue grew by 3.5% in the first half of the year to £3,221m (Hi 206: £3,113m). Adjusted profit before tax of £175m (H1 2016: £1842m) largely due to the challenging Plumbing & Heating market and recent investments, including in information systems.
The Contracts division delivered strong sales growth at 8.3% and 9.1% on a like-for-like basis. All businesses demonstrated excellent growth, with CCF the stand out performer. The division experienced significant input cost inflation in the half. Gross margin performance in the division was good as all three businesses focused on pricing activity to recover the input cost inflation. Adjusted operating margin expanded by 20bps with improvements from operating leverage partially offset by the shift in sales mix towards CCF and Keyline.
The CCF branches opened in late 2015 continue to mature driving sales growth and operating leverage. A new sales team structure in CCF has focused on high levels of customer service across large, medium and smaller customers.
John Carter, Travis Perkins chief executive, said: “We executed our plan well and delivered a solid overall performance in the first half of 2017 against a challenging market backdrop of pronounced input cost inflation and market volatility. The robust growth and outperformance in our Contracts and Consumer divisions build on strong customer propositions and successful investments in those businesses.”
