* 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
* 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
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
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
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.