IN PERSON
TRAVIS PERKINS RETURNS TO NET CASH DESPITE SLOW RECOVERY
Travis Perkins reported some significant improvements at the half-year, despite market conditions being less than ideal. CEO Gavin Slark talks through the figures.
T
ravis Perkins has reported a significantly strengthened balance sheet and improving performance in its core merchanting business in the six months to June 30 2026.
Overall group revenue slipped marginally to £2.58bn from £2.3bn a year ago, though operating profits were up 10% at £65m, from £59m.
In the Merchanting division, revenue was also down marginally, at £1.83bn, while Toolstation edged ahead at £425m, a rise of 1.7%.
Chief Executive Officer Gavin Slark said that it was really encouraging to see the general merchant business starting its line of recovery, and starting to impact the group numbers, “bearing in mind, Green and Gold is around about 50% of the group’s revenue”. He also highlighted the very strong performance again from Toolstation in the UK and from some of the specialist businesses as well.
“We anticipate that market demand in the second half of the year will be very similar to what it was in the first half,” he said. “We’re not anticipating a significant change in terms of market conditions, but I do think the strong cash position we’ve developed within the group over the first half of the year really underpins our financial resilience, flexibility, and gives us the ability to cope with whatever the market might throw at us during the second half of the year.” The group has moved from net debt before leases of £103m a year ago to a net cash position of £55m, representing a £158m year-on-year improvement and a £54m improvement since the end of 2025.
He added that, a year ago the group had net debt before leases of £103m; that is now net cash before leases of £55m. “That’s a £158 million improvement compared to where the business was a year ago and a £54 million improvement compared to where we were at the end of the year.”
Although the wider construction market remains challenging, Slark said the group’s financial position provides flexibility as trading conditions are expected to remain largely unchanged during the second half. One of the most encouraging aspects of the results, he said, was the improvement within
Travis Perkins’ General Merchanting business. He stressed, however, that the improvement had not been driven by one single initiative. “This isn’t a silver bullet solution,” he said. “The fact that we’re seeing the profit move
August 2026
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forward and the gross margin move forward is really an accumulation of a number of different efforts across that business that gives us a lot of confidence going forward.” Elsewhere across the group, Toolstation UK continued to trade in line with expectations, while several of the specialist businesses also delivered strong performances during the first half.
More than £30m will be invested this year in renewing the merchant fleet and upgrading branches across the estate. “We’ll have invested over £30 million in fleet renewal within the merchant business and also in the properties because a number of the branches needed refreshing, reinvigorating and renewing,” Slark said, adding that it was still being undertaken “in a very disciplined and controlled way.”
While the group is not expecting meaningful market growth during the rest of 2026, management believes there remains considerable scope to improve productivity and operational performance irrespective of external demand.
“Even in a market that we see as not giving us natural market growth, we still see opportunities for development across the business,” Slark said. He added that, with the completion of a significant leadership transition across the group, there’s a new executive team now firmly established. “We’ve now have a culture in the business of all the arrows pointing in the same direction, everybody pulling together,” he said.
Addressing wider market pressures, Slark acknowledged the impact of higher diesel costs on the business, although he suggested inflationary pressures on building materials had largely stabilised.
“For us as a distributor, probably where we’ve seen the bigger impact has been generally on diesel fuel,” he said. “That’s probably costing us around £50,000 a week more than it was prior.” However, he maintained that the group’s focus on protecting margins and controlling costs had left it well placed for the months ahead. “I think the disciplined approach that we’ve demonstrated around cost and around margin stands us in very good stead as we go forward during the second half of the year.” BMJ
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