Builders’ merchant Travis Perkins has reported a 5.9 per cent increase in turnover in the first quarter of 2011, compared with the same period in 2010.
In its interim statement to the Stock Exchange, covering the period from 1 January to 30 April 2011, the firm - which also owns Wickes and plumbing supplies company BSS - said turnover in its merchanting division was up 11.1 per cent.
It said “better operating cost leverage derived from the strong revenue growth is partly offsetting a lower gross margin”.
The statement added: “This reflects relatively stronger sales of direct-to-site deliveries, which operate on structurally lower margins, and the impact of higher product inflation.
“In a market showing little or no growth, high inflation takes time to feed through into sales prices, and in the near term slightly dilutes margins.”
There has been “no material change to the financial condition of the business”, but underlying net debt has reduced by £50 million from the £774m reported at 31 December 2010, with the firm on track for its debt target of £650m for the year end.
The Wickes owner has seen “slightly improved gross margins” in retail and in plumbing supplies arm BSS. BSS’ turnover is up 0.4 per cent, while Wickes’ is up 3.1 per cent.
Travis Perkins chief executive Geoff Cooper said: “After strong early progress against weak weather-related comparatives, we are pleased with the overall progress the group has made in the first four months of this year. Current trading is in line with management expectations with the benefit of strong sales performance balancing a slightly lower gross margin in merchanting.
“We continue to take market share against a tough market backdrop, confirming the sustainable strength of our organic growth strategy. Our more positive merchanting and BSS performance is more than balancing the effect of a challenging consumer environment for our retail business.”