Travis Perkins aiming for double-digit EBITA growth
Builders' merchant Travis Perkins has lifted its spending budget for 2015 and 2016 as it set out its growth targets, forecasting a double-digit increase in operating profits over the medium-term.
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The company said that annual capital expenditure over the next two years would be between £170m and £230m, compared with an estimated £130m-150m in 2014.
The increase, higher than originally planned, "principally relates to potential freehold site purchases and will largely depend on opportunities available in the market," it said.
The forecasts came ahead of a capital market day for investors and analysts on Thursday in London, with management setting out their predictions for the business.
Like-for-like sales are guided to increase by 1-3% per annum over the medium term, while earnings before interest, tax and amortisation are hoped to rise at a double-digit percentage rate.
Underlying earnings guidance for 2014 remains unchanged, but the company will take an exceptional charge of £20m relating to a store closure, the disposal of Rinus Roofing and the reconfiguration of the plumbing and heating branch and distribution centre network.
Chief executive John Carter said that the group's plans set out a year ago are "progressing well".
"The markets in which we operate have performed largely in line with our expectations. The response from customers to our improving propositions and our early investments has been encouraging," he said.
"This gives us confidence to continue our investment programme and accelerate the launch of our heavyside range centre network through 2015 and to exploit the group's UK scale advantage. We remain confident in the outlook for our markets and our ability to deliver sustainable market share gains."
The stock was down 0.8% at 1,747p by 08:25.