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UK's Travis Perkins says revenue growth driven by price rises
April 27, 2017 / 7:13 AM / in 7 months

UK's Travis Perkins says revenue growth driven by price rises

LONDON, April 27 (Reuters) - Travis Perkins, Britain’s biggest supplier of building materials, said on Thursday its customers had managed to withstand a raft of price rises brought in to offset higher costs sparked by the plunge in the pound after Brexit.

The group, which trades from over 20 businesses including Travis Perkins, Wickes, BSS, Toolstation and Tile Giant, said its total sales rose 4.9 percent in the first quarter of 2017, with sales at outlets open over a year up 2.7 percent.

Sales volumes across the group were broadly flat, while price inflation was 2.6 percent.

British shoppers have started to rein in their spending in recent months after the vote to leave the European Union hammered the pound, pushing up inflation at a time of muted wage growth and leaving shoppers with less discretionary spending.

Travis said its performance was in line with management’s expectations and it was on track to meet full year expectations.

“Revenue growth reflected careful pricing activity to recover input cost inflation assisted by the new pricing tools implemented over the last 12 months,” said Chief Executive John Carter.

He said recent market indicators such as mortgage approvals, housing transactions, house prices and consumer sentiment have given an inconsistent picture of the strength of the repair, maintenance and improvement (RMI) market for the balance of 2017.

Last month Travis Perkins had warned of rising costs and pressure on discretionary spending as it delivered a 67 percent slump in 2016 profit.

The group’s customers include local authorities, big building firms, traders such as plumbers and kitchen fitters and regular consumers, with its fortunes closely tied to housing transactions and consumer confidence.

Shares in Travis Perkins, down 14 percent over the last year, were down 0.4 percent in early trading, valuing the business at 4 billion pounds ($5.2 billion).

Separately on Thursday kitchen seller Howden Joinery said UK revenue increased 3.9 percent over the 16 weeks to April 15 and were up 2.4 percent at outlets open over a year - in line with its expectations.

“We believe that current market conditions are stable, albeit we remain watchful,” it said. ($1 = 0.7763 pounds) (Reporting by James Davey; editing by Kate Holton)

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