* Conventional economic solutions are not enough, CEO says
* Calls for cut to VAT on home improvement products
* Posts 2012 adjusted EPS of 95.1 pence, in line with forecasts
* Full-year dividend up 25 pct at 25 pence
* Shares down 3 pct
By James Davey
LONDON, Feb 20 The British government needs some radical thinking to get the economy moving, the boss of the country's biggest supplier of building materials, Travis Perkins , said on Wednesday.
"The trouble at the moment is that people are thinking of conventional solutions and I'm afraid we're not in conventional economic times, so we've got to think more radically to get some of these markets moving," Chief Executive Geoff Cooper told Reuters.
He called on finance minister George Osborne to cut VAT sales tax on home improvement products, particularly for renewable building projects, in the March 20 budget statement.
"There's a lot of evidence to show that if you increase economic activity in construction, you get a boost to the economy overall because most of the product is domestically derived and it's domestic activity," Cooper said.
The Bank of England has predicted a slow economic recovery over the next three years after two years of stagnation because of a mix of euro zone turmoil, government austerity and subdued consumer spending.
Cooper also wants the government to boost the housing market by extending its Funding for Lending scheme, cutting stamp duty and bringing back tax relief for first-time buyers.
He was speaking after Travis Perkins met forecasts by posting a 2.1 percent rise in 2012 earnings.
However, 2013 has got off to a slow start, with sales at branches open for more than a year down 5.1 percent in the first seven weeks of the year.
Travis Perkins shares, up 34 percent over the past year, were down more than 3 percent at 12.68 pounds at 1117 GMT, valuing the business at about 3.1 billion pounds ($4.8 billion).
Cooper expects volatile conditions to persist in the first half but is more optimistic about the second half, anticipating a pick-up in housing transactions and some benefit from government infrastructure programmes.
Though the company expects overall market volumes for 2013 to be lower than 2012, it said that the rate of decrease is likely to be smaller, at 1-2 percent.
Though both construction and consumer markets have been weak during the economic downturn, Travis Perkins has performed relatively well, winning market share and benefiting from the synergies provided by its 2010 purchase of plumbing and heating company BSS.
The group, which includes the City Plumbing, Keyline, Tile Giant, Toolstation and Wickes brands, made adjusted earnings per share of 95.1 pence in 2012 - in line with analysts' forecasts and up 2.1 percent from the 93.1 pence achieved in 2011.
Underlying pretax profit was up 1.1 percent at 300 million pounds ($463 million) on revenue 1.4 percent higher at 4.85 billion pounds. Like-for-like sales were down 1.4 percent.
The company, which cut net debt by 155 million pounds to 452 million pounds, is increasing the full-year dividend by 25 percent to 25 pence.
"These results show the quality of Travis Perkins, as it has delivered a steady performance in what remain tough markets," Panmure Gordon analyst Andy Brown said.