UK's Travis Perkins slides as DIY sales cool off

·2-min read
Signage is pictured at a building of Travis Perkins, a timber and building merchants yard in St Albans

(Reuters) -Travis Perkins said on Tuesday its Toolstation business swung to a loss in the first-half, as demand for do-it-yourself (DIY) products cooled off, sending the building materials seller's shares down 11%.

The London-listed firm said its revenue from Toolstation was 4.6% lower, while adjusted operating loss stood at 8 million pounds in the six months to June 30, compared with a 10 million pound profit last year.

J.P. Morgan analysts attributed the softer performance to a normalisation of the customer base after the COVID-19 pandemic spurred demand for home renovations and lifted DIY sales.

Meanwhile, the company said inflationary pressures, which were driven by supply chain issues last year, now largely stem from rising energy costs that have been passed on from manufacturers.

Travis Perkins expects to deliver full-year results in-line with market estimates.

Overall, revenue rose 10.3% to 2.54 billion pounds in the first-half, powered by its merchanting business which involves the sale of wood, sand and all types of building materials.

However, adjusted operating profit of 163 million pounds ($198.73 million) was slightly lower than 164 million pounds a year ago.

"On first glance, Travis Perkins' top and bottom-line performances appear to be relatively resilient," said Victoria Scholar, head of investment at interactive investor said.

"However, on closer inspection, the home improvement company has been struggling with reduced demand for DIY products after COVID-19."

Shares of the company, down 38.6% so far this year, fell to a two-year low but pared some losses and were trading at 954.64 pence at 0814 GMT. That valued the business at about 2 billion pounds.

($1 = 0.8202 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Rashmi Aich and Uttaresh.V)

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