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Construction sector pick-up buoys Travis Perkins

Published: 02:50 17 Oct 2013 EDT

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An uptick in house building activity is feeding through into trade demand, but the retail DIY market is still tough, according to builders’ merchant and Wickes owner Travis Perkins (LON:TPK).

Total sales rose by 8.6% in the three months to September, but all of the growth came from the trade side with sales dropping off in consumer where Wickes is facing fierce price competition.

Consumer sales growth slid to zero in the latest quarter from a like-for-like 8.6% in the two months to 30 June. Only stocking a small range of outdoor products also meant Wickes missed out on a boost from the hot UK summer.

Trade business was better, with like-for-like sales rising by more than 10% in the general and specialist merchanting divisions and by 5% in plumbing.

UK housebuilding as a sector has been very strong over the past year as the government’s Help-to-Buy scheme has ramped up. Price pressure in the trade market is starting to ease as well, Travis added.

Like-for-like sales rose by 6.3% across the group in the third quarter and for the year to date were 2.8% higher.

The company added it remains on track for full year earnings of 100p, despite £5mln of property sales gains now being postponed until next year.

Geoff Cooper, Travis’s chief executive, said: “The stronger trading conditions experienced by our merchanting businesses in particular is a reassuring indicator of improved sentiment in construction.

“The recovery in activity, signalled by us in early 2013, looks set to continue into 2014 as owners' and occupiers' construction and maintenance activity increases from the very low levels encountered over the last five years.”

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