Travis Perkins (LON:TPK) Releases Earnings Results

Travis Perkins (LON:TPK) issued its earnings results on Tuesday. The company reported GBX 15.10 earnings per share 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 Down 0.2%

Shares of Travis Perkins stock opened at GBX 665 on Thursday. The stock’s 50-day simple moving average is GBX 555.85 and its 200 day simple moving average is GBX 584.79. The stock has a market capitalization of £1.41 billion, a P/E ratio of -7.98, a P/E/G ratio of 6.44 and a beta of 1.28. Travis Perkins has a 52-week low of GBX 493.40 and a 52-week high of GBX 723.50. The company has a debt-to-equity ratio of 59.00, a quick ratio of 0.84 and a current ratio of 1.72.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on TPK. Deutsche Bank Aktiengesellschaft boosted their price objective on shares of Travis Perkins from GBX 470 to GBX 550 and gave the stock a “sell” rating in a report on Wednesday. Jefferies Financial Group restated an “underperform” rating and issued a GBX 443 price objective on shares of Travis Perkins in a research report on Wednesday. Peel Hunt reaffirmed a “buy” rating and set a GBX 660 price objective on shares of Travis Perkins in a research note on Tuesday. JPMorgan Chase & Co. lowered their price objective on shares of Travis Perkins from GBX 680 to GBX 630 and set an “overweight” rating on the stock in a research note on Tuesday, May 19th. Finally, Berenberg Bank raised their price objective on Travis Perkins from GBX 580 to GBX 650 and gave the stock a “hold” rating in a research note on Wednesday. Three research analysts have rated the stock with a Buy rating, one has given a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the company has an average rating of “Hold” and a consensus target price of GBX 613.83.

About Travis Perkins

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.