Turnover at builders merchant group Travis Perkins fell 13% to £1.452bn for the six months to June 30 as operating profits slipped 24.5% to £117.6m.
Pre-tax profit was £90.4m, down 27% from the same period a year ago However, on the bright side, net debt reduced by £491m, thanks in part to the £300m rights issue and free cash flow was up 43% at £196m.
Operating margins were maintained at a respectable 8.7% for the merchanting operation and 7.2% for the retail side.
Chief executive, Geoff Cooper says: “Although some signs of stability in our markets have appeared recently, there remain short term risks on the downside.
“The Group has performed ahead of our expectations in these testing markets conditions. We have cut costs, traded well and generated strong free cash flow. This has produced good operating margins, and together with the strengthening of the balance sheet has significantly reduced net debt.
“With strong market positions, attractive services and products, and financial security the Group is well placed to continue to perform ahead of competitors through this recession and to grow its business as longer term market prospects improve”.
Operating highlights include:
Only closing three branches out of a total 1,223.
Keeping reductions in overheads ahead of plan, with the cost base anticipated to be lower by £60m in 2009
Gross margin erosion limited to 30 basis points
Strong kitchen-led retail performance