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Highlight:

  • Resilient Q1 Trading: Group revenue fell 2.1% like-for-like, but Toolstation outperformed with 3.7% revenue growth, boosting investor sentiment.

  • Strategic Reset Underway: Travis Perkins is addressing past missteps by improving branch-level autonomy and focusing on customer service.

  • Positive Market Response: Shares climbed 4% in early trade; Peel Hunt reaffirmed its ‘buy’ rating with a 750p target.

Shares in Travis Perkins PLC (LSE:TPK) rose nearly 4% in early Tuesday trading after the building materials group posted a resilient first-quarter performance despite persistent pressures in the UK construction market.

For the three months ending 31 March 2025, group revenue fell 2.1% on a like-for-like basis, with total revenue down 2.4% after accounting for trading days and changes to its operational network. The modest decline, however, was broadly in line with market expectations, leading to cautious optimism among investors.

The company's Merchanting division, which caters to trade customers across a broad range of building materials, reported a 3.2% decline in like-for-like revenue. This was driven primarily by softer volumes and a stabilisation of pricing across key product lines. Despite the slowdown, Travis Perkins highlighted ongoing efforts to enhance customer engagement and efficiency by investing in branch-level and sales teams, aiming to reverse earlier market share losses.

In contrast, Toolstation, the group’s consumer-facing retail arm, delivered a 3.7% increase in like-for-like revenue. Management credited this to successful margin improvement initiatives and operational enhancements. The division’s performance provided a key support to the group’s broader financial resilience in a tough macroeconomic climate.

Travis Perkins acknowledged that market conditions remain challenging due to sluggish housing activity, tighter credit conditions, and subdued construction demand. However, it noted progress in key operational areas, particularly within its retail segment and customer service initiatives across the merchanting network.

Broker Peel Hunt reacted positively to the update, maintaining its ‘buy’ recommendation and a 750p price target, citing the group as a potential turnaround play. The broker acknowledged past missteps, including over-centralisation and management-driven constraints at branch levels, which had previously led to sales staff departures and loss of share.