In news o UK stocks, Travis Perkins plc (GB:TPK) cut its final dividend for Fiscal 2023 to 5.50p per share, drastically lower than 26.50p paid in H2 FY22, as its full year profits took a massive hit. The British builder’s merchant and home improvement retailer reported a 32.5% decline in its Fiscal 2023 adjusted operating profits to £212 million. Also, revenues fell 4.4% year-over-year to £4 billion. TPK shares dipped 6.5% in early morning trading following the news but were down 0.72% as of the last check.
The proposed final dividend brings the total dividend amount for Fiscal 2023 to 18p per share, significantly lower than the prior year’s dividend of 39p per share. The FTSE-100 listed company’s performance was daunted by the tough conditions in the home market and growing debt pressure.
To cut costs, Travis Perkins said that it will reduce capital expenditures to £80 million, lower than its medium-term guidance of GBP125 million. The company’s debt currently stands at 2.6x its underlying earnings.
TPK Cautions of Continued Market Weakness
Looking ahead, Travis Perkins cautioned of continued market weakness, as the UK construction sector is expected to remain dull until the country’s general elections take place. The company said that customers are waiting for any potential “post-election government stimulus package for the sector.” Moreover, customers are anticipating clarity on the interest rate trajectory before making any more purchasing decisions.
Based on these factors, Travis Perkins anticipates weak demand in 2024. Also, the company does not expect to reap any substantial pricing benefit as lower lumber prices roll over into the first half of this year.
Are Travis Perkins Shares a Good Buy?
On TipRanks, TPK stock has a Hold consensus rating based on one Buy versus four Hold ratings. The Travis Perkins plc share price target of 859.40p implies 11.5% upside potential from current levels. These ratings were given before the results were announced and are subject to change.
