Expansion for Travis Perkins

BUILDING materials group Travis Perkins pledged to further expand its branch network after seeing annual pre-tax profits surge 26%. The Northampton-based company also benefited from healthy market conditions as group like-for-like sales grew 5.1% last year. Pre-tax profits in the year to 31 December rose to £110.5m from £87.3m a year earlier.

Last year, the group increased its number of branches by 29 to 502 - including 145 tool hire outlets - but said it still had room for more.

Chief executive Francis McKay said: 'We have a proven strategy of growing our business in the UK. It continues to serve us well as we target gaps in our regional coverage.

'We are regularly identifying new opportunities for growth through the acquisition of independent merchants and the development of greenfield sites.'

While the company expected further earnings growth this year, chairman Tim Stevenson sounded a note of caution about the housing market. He said: 'The recent increase in property transactions and new housing starts may be tempered by more cautious forecasts for economic growth and uncertainty as to the future course of interest rates.'

Stevenson took over as chairman following Tony Travis's retirement in October after 36 years with the company.

During that time group turnover rose one hundred fold to last year's £1.28bn and the number of branches increased from 21 in 1966.

More than 100 outlets were obtained in 1999 when Travis acquired Keyline and the company said those rebranded stores were performing well.

Operating margins before one-off items topped 10%, although the company said it continued to be hampered by higher employment costs. Shareholders will receive a total dividend of 17.2p a share, an increase of 12.4% on a year earlier.