Travis Perkins PLC higher as sales begin to recover following reopening

The building materials group said since mid-June its merchanting businesses has “continued to recover well” while its Toolstation and Wickes businesses “continue to benefit from strong DIY sales”

PLC () shares rose on Tuesday as the group highlighted a recovery in sales as its stores reopened following a relaxation of coronavirus lockdown restrictions.

In a trading update for the six months to June 30, 2020, the builder’s merchant reported that sales in the period had fallen 19.3% on a like-for-like basis, with sharp declines in its merchanting and plumbing & heating (P&H) businesses offsetting a strong rise in its Toolstation arm.

READ: Travis Perkins unveils plans to cut 2,500 jobs

Revenues in the first half also dropped by 20% to £2.78bn due to the “significant impact” of the coronavirus pandemic and the resulting lockdown.

However, the company said that since mid-June its merchanting businesses have “continued to recover well” with an improvement in repair, maintenance & improvement (RMI) markets and infrastructure spending proving “more robust than the new housebuilding and commercial construction markets”.

The P&H market was also recovering, albeit more gradually, as projects in the division were predominantly carried out indoors, presenting challenging amid social distancing measures.

Meanwhile, said its Toolstation and Wickes “continue to benefit from strong DIY sales”, with Wickes achieving strong sales growth in June following the reopening of its stores in late May. The division saw “significant growth” in its core DIY categories, which had more than offset a slower recovery in kitchen and bathroom installations.

The firm said despite the closure of 165 branches in June, around 8% of its estate, it had “continued to experience an improving trend on total sales volumes so far in July”, with the company’s sales run rate now close to the prior year.

“Since the trading update on 15 June, the business has continued to recover well with good demand from RMI and infrastructure markets offsetting ongoing challenges in the new build and commercial construction sectors”, said chief executive Nick Roberts.

“We remain cautious as to the near-term headwinds facing our business and the wider economy, nevertheless the decisive actions we have taken to manage our cost base mean that we are well placed to continue to service our customers, support our colleagues and generate value for our shareholders”, he added.

Shares in the company rose 2.4% to 1,231.5p in early deals.

Read MoreTravis Perkins PLC higher as sales begin to recover following reopening

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