According to trading statements, Builders' merchant Travis Perkins, owner of Wickes, started poor on markets as economic recovery began. However, the company has become popular among analysts, 10 of whom projected Travis Perkins as a strong buy, even though, the group was trading at a relatively cheap 10.8 times on 2010 earnings.
But on Friday, Travis Perkins gave cheering expectations to the investors by stating that it had performed well in the first half, with its sales up by 3.4%. The Company’s CEO also exclaimed that it would also go for dividend payouts with a 5% interim dividend.
The Company is also expected to announce its £553m deal to buy BSS, the plumbing supplies company sooner in this week. As per the analysts at Liberum Capital, the business would then account to 16% in 2010 earnings.
Travis’ trading has been improved on the ground of the two-third of the sales generated by its merchant arm due to pulling up in house builders’ demand. With this rising optimism, new construction sites have been opened again for the consumers.
The public spending can affect the 8% of the division, which is a matter of worry, as told by Questor. So, he recommends the investors not to buy the shares of the company.