Travis Perkins plc - Significant upgrade to full year earnings expectations

Davy Research
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Travis Perkins (TPK) has joined the upgrade party in a meaningful way. With the simplification of the group structure now effectively completed, investors can focus on the merits of what is a trade-focused business with an exciting growth format in Toolstation. The unscheduled update confirmed the group is trading well and benefiting from the high level of demand from the UK RMI sector. Having been cautious as recently as mid-April, TPK is now guiding adjusted operating profit will be at least £300m this year, over 15% above the most recent company compiled consensus estimate. Not surprisingly, the reaction was positive, with the near-7% gain taking the stock’s advance to over 35% year-to-date.