Travis Perkins Regulatory News (TPK)

9 May 2011

Travis Perkins plc

Interim Management Statement - 1 January to 30 April 2011

Continued growth despite flat markets

Travis Perkins, the leading UK builders' merchant and DIY retailer, today issues this Interim Management Statement for the period to 30 April 2011.

Including BSS in 2010 on a proforma basis, Group turnover for the four months to the end of April, which included two fewer trading days in our merchanting and BSS divisions than for the comparable period in 2010, was up 5.9%. Overall turnover without this proforma adjustment was ahead by 58.2%.

The non-BSS revenue gains have been driven by relatively high product inflation and our own market outperformance. Whilst the market continues to deliver little or no growth, our organic development strategy continues to progress with further gains in like-for-like market share in both our merchanting and retail divisions. In addition, we added an additional 14 net branches in the first four months of this year, bringing the total number trading up to 1,827.

For the first four months of 2011 total turnover in our merchanting division was up 11.1%, representing an increase in like-for-like turnover per trading day of 12.8%. Like-for-like turnover per trading day for the last two months to 30 April increased by 10.4%. General merchanting total turnover was up 10.5% for the four months, with like-for-like turnover per trading day up 12.5%, whilst our specialist merchanting business saw total turnover increase 12.0% with like-for-like turnover per trading day up by 13.4%.

In Wickes, delivered turnover for the 17 week trading period to 30 April was up 3.1% with like-for-like delivered sales up by 1.9%. Core product like-for-like sales, representing some 80% of turnover, increased by 5.9%. Kitchen and bathroom ("K&B") delivered sales were down 12.0%, reflecting weakening consumer confidence for major purchases. For the last nine weeks total (core plus K&B) like-for-like delivered sales were down 1.2%.

Following the enforced disposal of 12 PTS branches during the period, total turnover for BSS for the first four months of 2011 was up by 0.4%; like-for-like turnover per trading day was up 2.3%. Like-for-like turnover per trading day for the two months to 30 April increased by 0.2%, reflecting the anniversary of the one-off benefit of the boiler scrapage scheme experienced in early 2010.

We have seen slightly improved gross margins in Retail and BSS, in the latter case partly due to improved mix from relatively higher non-boiler sales. In merchanting, better operating cost leverage derived from the strong revenue growth is partly offsetting a lower gross margin. This reflects relatively stronger sales of direct to site deliveries, which operate on structurally lower margins and the impact of higher product inflation. In a market showing little or no growth, high inflation takes time to feed through into sales prices, and in the near term slightly dilutes margins.

Our synergy programme arising from the acquisition of BSS remains on course to deliver the benefits we previously outlined and our integration of BSS is progressing well. A further update will be provided as part of our half-year announcement in July.

With our continuing focus on cash generation, underlying net debt, has reduced by £50m in the four months to 30 April from the £774m reported at 31 December 2010. We are on track for our debt target of £650m for the year end. There has been no material change to the financial condition of the business.

Geoff Cooper , Chief Executive , commented:

"After strong early progress against weak weather related comparatives, we are pleased with the overall progress the Group has made in the first four months of this year. Current trading is in line with management expectations with the benefit of strong sales performance balancing a slightly lower gross margin in merchanting.

"We continue to take market share against a tough market backdrop, confirming the sustainable strength of our organic growth strategy. Our more positive merchanting and BSS performance is more than balancing the effect of a challenging consumer environment for our retail business''.

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