Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • TPK H1 revenue fell 2.1% to GBP 2.3 billion, impacted by early-year operational challenges in Merchanting.
  • TPK adjusted operating profit down 24% YoY to GBP 63 million in H1 due to lower volumes and increased promotions.
  • Net debt before leases reduced by GBP 88 million to GBP 103 million, supported by capital release and asset sales.

Travis Perkins plc (LSE:TPK), the UK’s largest distributor of building materials, has reported a 2.1% decline in group revenue to GBP 2.3 billion for the six months ended 30 June 2025. The performance was weighed down by activity in the Merchanting division, particularly in the first quarter, while Toolstation UK saw improvement in both profitability and market share. Adjusted operating profit fell to GBP 63 million, down 24% from GBP 83 million in the same period last year. This decline was largely attributed to an GBP 18 million reduction in gross profit, driven by softer trading volumes, increased promotional activity, and one fewer trading day. Despite these challenges, statutory operating profit rose to GBP 59 million from GBP 48 million in H1FY24.

The Merchanting business reported like-for-like sales declines of 3.2% in Q1 and 1.0% in Q2, indicating some stabilisation following management actions to improve customer focus. Market share erosion, which had been an ongoing concern, was reported to have levelled off by the end of the second quarter and into July. Toolstation UK delivered a 50% increase in operating profit, reaching £21 million, helped by operational maturity and gains in market share. However, property profits were £2 million lower than the previous year.

Leadership changes are underway, with Gavin Slark set to take over as Chief Executive Officer from 1 January 2026. Slark brings experience from previous roles at SIG plc, Grafton Group, and The BSS Group. In the interim, structural changes have been implemented across the Specialist Merchant units, with Catherine Gibson appointed Managing Director overseeing BSS, CCF, Keyline, and TF Solutions. Additional management appointments include Lakhvir Sanghera as Managing Director of Toolstation UK, replacing Angela Rushforth upon her retirement, and Richard Lavin taking over as Managing Director of Travis Perkins General Merchant. All newly appointed leaders have long-standing tenure within the company.

The group made progress on deleveraging, reducing net debt before leases by GBP 88 million to GBP 103 million and total net debt by GBP 135 million. This was achieved through improvements in working capital, capital discipline, and the sale of the Staircraft business. Over the past 18 months, the company has released over GBP 250 million of capital, with total net debt reduced by GBP 212 million. The board has proposed an interim dividend of 4.5 pence per share, down from 5.5 pence in 2024, in line with the dividend policy of distributing 30–40% of adjusted earnings. The dividend will be paid on 7 November 2025 to shareholders on record as of 3 October 2025.

Looking ahead, the group expects to deliver full-year adjusted operating profit, including GBP 8 million in property gains, broadly in line with current market expectations. However, it acknowledged that the outlook remains uncertain due to subdued end-market demand and the unclear timing of recovery in the UK construction sector. Capital expenditure for 2025 is expected to be around £80 million, with an estimated effective tax rate of approximately 30% on UK-generated profits.

TPK is trading 3.36% higher at GBX 553.00 per share as of 5 August 2025.