Travis Perkins: H1 Group Sales Down; Solid Toolstation Performance

Travis Perkins plc, the UK’s largest distributor of building materials, announces its half year results for the 6 months to 30 June 2026

Resilient performance with early progress in General Merchant turnaround

• Group revenue declined (1.8)% driven by a reduction in volumes in challenging market conditions and the prior year disposal of Staircraft, partially offset by building material price inflation
  
  
• Adjusted operating profit excluding property profits held steady at £62m (2025: £62m). Statutory operating profit of £65m (2025: £59m)
  
  
• Encouraging early progress in expanding gross margin in the General Merchant, delivered through more effective pass-through of price inflation, favourable sales mix and procurement gains
  
  
• Toolstation UK is performing in line with expectations with further growth in revenue, operating margin and return on capital employed. Trading in Toolstation Benelux remains challenging
  
  
• Specialist businesses showing resilience with weakness in the new-build market partially offset by improving demand for infrastructure projects 

Continued financial strengthening

• Strong cash generation driven by working capital discipline, rigorous capital allocation and active management of the property portfolio
  
  
• Significantly strengthened balance sheet with net cash before leases of £55 million (2025: £103 million net debt)
  
  
• Net debt / adjusted EBITDA 1.9x (2025: 2.3x), back within the Group’s target range of 1.5x–2.0x
  
  
• Interim dividend of 4.0p per share, reflecting the Group’s dividend policy 

¹ Alternative performance measures are used to describe the Group’s performance. Details of calculations can be found in the notes listed.

CEO Gavin Slark commented: “I have enjoyed my first half since joining as CEO in January. I have developed a clear understanding of our many strengths, but also where we need to improve if we are to restore the Group’s financial performance and reach our potential. We have built on the operational progress made last year, with a new senior leadership team in place and a clear set of priorities. This stability and focus is serving us well as we implement further change. We have made encouraging early progress in rebuilding profitability in the General Merchant and Toolstation UK continues to perform in line with our expectations. We continue to place the customer back at the heart of the business, recognising the value of strong relationships and the importance of providing great service. Our financial position continues to strengthen and is providing us with the flexibility to invest where we see the best opportunities ahead of any market recovery.  I would like to thank all our colleagues for their dedication and commitment during the first half. We can be confident and optimistic about our future prospects.” 

H1 2026 Performance

The Group reported revenue of £2,258m, down (1.8)% on prior year. The decline in revenue was predominantly driven by the Merchanting segment, where end markets remain challenging, and the comparative effect of the disposal of Staircraft. Toolstation UK growth remains in line with the Board’s expectations as the business continues to roll out further operational enhancements and efficiencies. 

Adjusted operating profit of £67m was £4m, or 6.3%, higher than prior year driven by:

• £11m expansion in gross margin delivered through a more effective pass-through of price inflation, favourable sales mix and improved procurement terms
  
  
• Partial mitigation of significant overhead inflation arising from increased employment and property costs, through restructuring activity and rigorous approach to discretionary spend
  
  
• Property profits £4m higher than prior year 

Balance sheet

The Group has made strong progress on strengthening the balance sheet during the first half, with net cash before leases at £55m (December 2025: £1m net cash before leases). This has been delivered through further working capital efficiencies and realising value from the Group’s property portfolio where it is appropriate to do so. Capital expenditure remains tightly controlled with investment targeted into renewing the Group’s fleet and refurbishing uninvested parts of the estate. Accordingly, leverage (net debt / adjusted EBITDA) has reduced by 0.2x to 1.9x from December 2025, returning to within the Group’s target range of 1.5–2.0x for the first time since December 2022 and commensurate with investment-grade status. 

Dividend

The Board is recommending an interim dividend of 4.0 pence per share (2025: interim dividend of 4.5 pence per share), in line with the Group’s policy to pay a dividend of 30-40% of adjusted earnings. The dividend will be paid on 6 November 2026 to shareholders on the register as at close of business on 2 October 2026.

Outlook

The Group is seeing encouraging early progress in its operational turnaround. However, the UK construction sector remains subdued with activity levels remaining depressed during the first half. In addition, given wider geopolitical and macroeconomic events, building materials price inflation remains hard to forecast.  The Group expects market conditions in the second half to be comparable to the first and as such expects a similar trading performance. Against this backdrop the Group remains focused on improving what lies within its control and is optimistic about its future prospects.

Technical guidance

The Group’s technical guidance for 2026 is as follows:

• Expected ETR of around 28% on UK-generated profits
  
  
• Base capital expenditure of £60–70m
  
  
• Property profits of around £5m

Adjusting items

There were no material adjusting items in the period or H1 2025. In H2 2025 there were £222m of adjusting items related to impairments of Toolstation Benelux, CCF and specific Merchanting branches; the sale of Staircraft; and restructuring actions. 

The Group’s Merchanting businesses saw a like-for-like revenue decline of (1.2)%, as success in passing through manufacturers’ price increases and a focus on higher margin sales was outweighed by the ongoing impact of subdued levels of UK construction activity. A £25m comparative impact from the divestment of Staircraft in 2025 saw overall revenue decline by (2.6)% in 2026 H1.

TP General Merchant (TPGM) has made encouraging early progress in rebuilding its profitability. Management have been clearly focused on passing through price inflation whilst also being selective about low margin trade or unattractive credit risk. The business is now benefiting from a stable and streamlined management team that are continuing to look for ways to reduce costs and deliver further efficiencies.

BSS and Keyline traded in line with their markets, whilst seeking to protect gross margins and delivering operational productivity gains. CCF saw performance weaken versus H1 2025 and its management team is taking action to ensure that, even with a depressed new house-building sector, it is able to deliver appropriate returns. TF Solutions, the Group’s HVAC business, saw significant revenue growth, fuelled by the warm early summer weather, and returned to profitability as it benefited from strong air-conditioning supplier relationships and expansion in its refrigeration offer.

Adjusted operating profit reduced by (5.0)% to £60m with adjusted operating margin decreasing by (10)bps, as gross margin expansion and cost control were unable to fully offset inflationary pressures.

There were limited changes to the Merchanting network in the first half with the closure of 11 subscale TPGM branches and three openings, reflecting a clear focus on protecting operational capacity and capability to ensure that the business is able to fully benefit from any future market recovery. 

UK

Toolstation UK delivered another solid performance with sales increasing 2.6%, as the business was able to pass through supplier price increases and continued to grow its market share. Toolstation Club now has 900,000 members, with 200,000 new customers joining in the first-half of 2026, and continues to drive higher customer loyalty and average order value. The network is expected to increase by around ten stores for the full year, with a medium-term target of 650 stores planned for rollout. UK adjusted operating profit grew by 4.8% to £22m, with operating margin expanding by 10bps to 5.8% driven by improvements in the gross margin mix and retail labour model efficiencies, which were able to offset overhead inflation pressures, particularly from distribution, property and employers’ national insurance.

Benelux

Toolstation Benelux saw revenue decline by (6.1)% and its operating loss increased to £7m. Following a strategic review of the Benelux business announced in March 2026, the Group has initiated discussions with multiple interested parties regarding the possible divestment of this business.

Financial Performance

Revenue analysis

The Merchanting businesses were able to achieve an effective pass-through of manufacturer price increases and deliver procurement benefits in the first half of 2026, however construction activity levels remained subdued resulting in an aggregate like-for-like revenue decrease of (1.2)%. The impact of network changes reflects the divestment of Staircraft in 2025 H1.  Toolstation UK delivered solid like-for-like growth as the business continues to mature, enhance its customer proposition and take market share.

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Source : Travis Perkins plc

Image : Travis Perkins plc

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