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Travis Perkins says sales growth is slowing

Builders' merchant and DIY retailer Travis Perkins said growth had slowed in its most recent weeks of trading as it posted a rise in third-quarter sales along with market share gains.

The group, which trades from over 1,200 branches under Travis Perkins, Keyline, Wickes and other brand names, said on Monday its outlook for the year as a whole remained unchanged.

The firm, which is trying to buy plumbing and heating company BSS Group (BTSM.L) for about 580 million pounds, said turnover at branches in its merchanting division open at least a year increased 10.3 percent in the three months to September 30.

"This rate has shown signs of moderating in the most recent few weeks of trading," it said.

At Wickes like-for-like sales were up 0.6 percent with relatively weaker trends in big ticket purchases.

The firm said third-quarter gross margins were slightly below last year in merchanting and ahead of last year at Wickes.

However, it said the recent response by competitors to the reduction in their market shares has resulted in an erosion of some of this gain at Wickes.

Total group sales for the nine months to September 30 rose 6.0 percent.

Shares in Travis Perkins closed on Friday at 864 pence, valuing the business at 1.8 billion pounds.

The purchase of BSS will create the biggest plumbing and heating trade and retail distribution business with a market share of 20-25 percent, overtaking Wolseley (WOS.L). The deal has been backed by both companies' shareholders. However, last month the Office of Fair Trading said it had extended the decision date on whether to give the deal the go ahead to October 19.

Travis Perkins said in July it would offset an expected steep fall in public sector new build business due to government cuts with growth in other customer groups.

Source : Reuters - James Davey

11 October 2010
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