Travis Perkins Q1 Update – What to Expect

Travis Perkins (LON: TPK), a key player in the building materials industry, is poised to unveil its first-quarter trading update on April 25. This update, eagerly anticipated by investors and analysts, is expected to provide crucial insights into the company's performance.

Investment bank Citi provided its preview in a recent note, telling investors that they expect the update to outline a continuation of its weak trading backdrop.

In March, the company said its 2023 was impacted by “weak market conditions,” which saw revenue and profit fall. The company also declared a reduced full-year dividend.

Travis Perkins shares have fallen more than 10% this year and over 17% in the last 12 months of trading.

Citi also expects the company to reiterate its guidance for full-year 2024 operating profit in the range of around £160 million to £180 million, supporting current expectations. The analyst average consensus expectation for group adjusted operating profit, excluding property profits, is £179 million. In addition, the average analyst consensus for 2024 revenue is £4.84 billion.

Furthermore, the investment bank sees like-for-like sales decreasing by -4% for the group, reflecting annualisation of lower timber prices in merchanting and the ongoing caution on outlook.

Even so, overall, Citi said it expects the group's cost actions to mitigate current market headwinds and the strategic exit from Toolstation France to improve investor sentiment, which they believe should drive a re-rating.