Travis Perkins chief executive Geoff Cooper has called on government to put “concrete in the ground” on the projects it prioritised three months ago.
Mr Cooper spoke to Construction News after the builders’ merchant posted a 52 per cent hike in revenue to £4.77bn for the year to 31 December 2011, with pre tax profit up 37 per cent to £296.7million, on 2010 figures.
Speaking about the infrastructure pipeline announced at the autumn statement, he told CN: “I think that’s a victory for the construction industry; but winning the argument does not put concrete in the ground and we need government to take action, having been convinced by the industry, to put real money behind projects and to put more concrete in the ground.”
Government should look at direct borrowing and alternative funding streams for infrastructure, such as borrowing against future revenues, he said.
He added: “It seems to me that, at a point where government can borrow money relatively cheaply, it seems daft not to take that opportunity.”
Mr Cooper also called for the return of tax relief scheme Miras – the mortgage interest relief at source – which he said is a “much better way” of stimulating the housing market.
“I can think of nothing that will boost the market more dramatically,” he said.
Mr Cooper suggested lenders will be the main beneficiaries of the government-backed NewBuy mortgage indemnity initiative – aimed at enabling people to borrow at 95 per cent loan to value and reducing sky-high deposits.
“The mortgage guarantee will help, but I worry about the high interest rates that banks will charge for that,” he said.
Travis Perkins’ performance was largely down to the success of the acquisition and integration of BSS, the plumbing supplies business it bought in 2010 for £558m. Outside of this, on an adjusted proforma basis, operating profits were up by £11m, an increase of 3.6 per cent, with like-for-like sales up 6 per cent.
“We have performed significantly ahead of the market; as everyone knows the market is quite difficult at the moment; there is tremendous pressure on contract prices and margins,” he told CN.
“Everyone is looking to become more efficient and we are working with customers on that to get the best deal that they can. A lot of what we do is talking about requirements; how we can service those models that are most effective and at the right price.”
This includes working out what creates value for customers within supply chain, procurement and operational assets.