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Better housing market a boost for Howdens and Travis

The number of property transactions in Britain is growing and mortgage approvals are ahead of last year as government initiatives to stimulate the housing market start to kick-in.

Travis Perkins (TPK.L), Britain's biggest supplier of building materials, said on Thursday its underlying pretax profit rose 4.1 percent to 136.1 million pounds ($209 million) in the six months to June 30, on revenue up 1.6 percent at 2.45 billion pounds.

The company, which also trades as Wickes, City Plumbing, Keyline, Tile Giant and BSS, said a poor first quarter was made worse by cold weather around Easter. However, demand picked-up significantly in May and June and the better trend has continued into the second half.

"Lead indicators for the remainder of this year, and for 2014, are strengthening, with new housing leading the way," said Chief Executive Geoff Cooper, who the company said would retire in the new year.

Travis raised its interim dividend 25 percent to 10 pence and forecast full-year earnings per share in line with the market consensus of about 100 pence.

Shares in the firm, which last month entered the FTSE-100 index of Britain's largest companies, have risen 71 percent over the last year. But the stock was down 10 pence at 1,699 pence at 0825 GMT, valuing the business at 4.1 billion pounds, as news of the highly regarded Cooper's planned departure took the shine off the positive outlook.

Cooper, CEO since 2005, will step down from the top job on January 1 and as a director on March 6. He will be succeeded as CEO by John Carter, the current deputy chief executive.

Cooper told Reuters he had originally planned to stop working full-time when he was 55, but had stayed with Travis to steer it through the recession.

"We're in really good shape now. I'm 60 next year. I work seven days a week and I promised my wife I would stop," he said.

Howden, the surviving remnant of the MFI Furniture group, said underlying pretax profit jumped 67 percent to 43.2 million pounds in the 24 weeks to June 15, on revenue up 7.2 percent at 390.8 million pounds.

The group, which sells kitchens from 537 UK depots to over 270,000 small builder account customers, said sales were up 7.6 percent in the first four weeks of its second half.

Shares in Howden have more than doubled over the last year as it has been trading robustly and property liabilities relating to its previous ownership under MFI have been mitigated. The stock was up 4.5 percent at 287.7 pence, valuing the business at 1.85 billion pounds.

The firm is paying an interim dividend of 1.0 pence, up from 0.3 pence last time.

($1 = 0.6512 British pounds)

Source: Reuters
(Reporting by James Davey; editing by Mark Potter and Tom Pfeiffer)

26 July 2013

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