Travis Perkins (TPK) H2 2024 earnings summary

Executive summary

• Leadership transition with the Chairman taking a more active role amid management changes and a focus on empowering local teams.

• Revenue declined 4.7% year-over-year to £4.6 billion, reflecting a challenging trading environment and competitive pressures.

• Adjusted operating profit excluding property profits fell 23% to £141 million, with gross margin decline partially offset by cost savings.

• Toolstation UK showed growth and remains a strong performer, while European operations were restructured and losses addressed.

• Merchanting businesses underperformed, impacted by deflation, volume declines, and operational challenges.

Financial highlights

• Group revenue for 2024 was £4.6 billion, down 4.7% year-over-year.

• Adjusted operating profit fell 23.2% to £152 million; adjusted EPS dropped 32.7% to 36.6p.

• Net debt before leases reduced by 39.2% to £191 million, with leverage down to 2.5x.

• Ordinary dividend per share reduced 19.4% to 14.5p, aligning with revised policy.

• EBITDA decreased to £332 million from £369 million year-over-year.

Outlook and guidance

• FY25 adjusted operating profit (excluding property profits) expected to be broadly in line with FY24.

• Base capital expenditure guidance for 2025 is around £80 million.

• Effective tax rate for 2025 expected to be about 30% on UK profits.

• Uncertainty remains around the timing and strength of UK construction recovery, especially in RMI.

• Pricing has stabilised, but modest volume decline in Merchanting expected.