Travis Perkins half-year results 2026: cash strengthens as turnaround begins

Travis Perkins PLC has reported a resilient first half of 2026, with early turnaround progress and much stronger cash metrics offsetting another decline in revenue.

The UK's largest distributor of building materials generated revenue of £2,258 million, down 1.8% from £2,300 million. Lower volumes, difficult construction markets and the previous disposal of Staircraft all weighed on sales.

However, adjusted operating profit rose 6.3% to £67 million. Excluding property profits, it was unchanged at £62 million. That distinction matters because property profits contributed £5 million, compared with £1 million last year.

The most encouraging part of the update was the balance sheet. Travis Perkins moved to net cash before leases of £55 million, compared with net debt of £103 million in June 2025. Leverage also returned to the group's target range.

Travis Perkins half-year results at a glance

Metric	H1 2026	H1 2025	Change
Revenue	£2,258 million	£2,300 million	-1.8%
Adjusted operating profit	£67 million	£63 million	6.3%
Adjusted operating profit excluding property	£62 million	£62 million	No change
Statutory operating profit	£65 million	£59 million	10.2%
Profit after tax	£30 million	£26 million	15.4%
Adjusted earnings per share	15.1p	13.3p	13.5%
Return on capital employed	5.7%	4.9%	0.8 percentage points
Net debt to adjusted EBITDA	1.9 times	2.3 times	Improved by 0.4 times
Interim dividend	4.0p	4.5p	-11.1%

Return on capital employed, or ROCE, measures the operating return generated from the capital invested in the business. Its improvement to 5.7% is welcome, although the absolute return remains modest.

Profits held up better than revenue

Group like-for-like revenue declined by 0.7%. Like-for-like figures strip out effects such as branch openings, closures and disposals to provide a clearer view of underlying trading.

Volumes fell 3.2%, but price and sales mix contributed 2.5%. This shows that Travis Perkins is still facing weak customer demand, rather than enjoying a broad recovery in activity.

The company nevertheless secured an £11 million gross margin improvement. This came from passing manufacturers' price increases through to customers more effectively, focusing on higher-margin sales and securing better procurement terms.

Management also used restructuring and tighter discretionary spending to offset part of the inflation in employment and property costs.

This is useful early evidence that the business can improve execution without waiting for construction markets to recover. The catch is that underlying operating profit, once property gains are removed, did not grow.

General Merchant turnaround shows early progress

Merchanting revenue fell 2.6% to £1,833 million, including a £25 million comparative impact from the Staircraft disposal. Like-for-like sales declined by 1.2%, an improvement from the 2.1% decline reported in the previous first half.

Adjusted operating profit fell 5.0% to £60 million, while the margin slipped from 3.4% to 3.3%. Gross margin gains and cost controls were not enough to offset inflationary pressures fully.

There were some better signs beneath those numbers. Second-quarter Merchanting like-for-like sales were flat, compared with a 2.3% decline in the first quarter.

The General Merchant business is being more selective about low-margin trade and customers presenting unattractive credit risks. This may hold back revenue, but it should help protect margins and cash collection.

Travis Perkins closed 11 smaller General Merchant branches and opened three during the half, taking the Merchanting network to 719 branches.

Elsewhere, BSS and Keyline traded in line with their markets. CCF weakened against the prior year amid depressed housebuilding activity, while TF Solutions returned to profitability following significant revenue growth supported by demand for air-conditioning products during the warm early summer.

Toolstation UK grows, but Benelux remains a drag

Toolstation delivered total revenue of £425 million, up 1.7%, while adjusted operating profit was unchanged at £15 million.

The UK business performed more strongly. Sales increased by 2.6%, adjusted operating profit rose 4.8% to £22 million and its operating margin improved by 0.1 percentage points to 5.8%.

Toolstation Club reached 900,000 members after attracting 200,000 new customers during the half. Travis Perkins said the scheme supports greater loyalty and a higher average order value.

The UK network remained at 590 stores, with around ten additions expected across the full year and a medium-term target of 650.

Benelux remains the problem. Revenue fell 6.1% and its adjusted operating loss increased from £6 million to £7 million. Following a strategic review, Travis Perkins has started discussions with multiple interested parties about a possible disposal. No valuation or timetable was disclosed.

Cash generation transforms the balance-sheet picture

Free cash flow before freehold transactions was £72 million, down from £96 million. Even so, working capital discipline and property disposals helped cash and cash equivalents increase by £55 million during the half.

Net debt, including lease liabilities, fell by £77 million from December 2025 to £544 million. Before leases, the group had net cash of £55 million, up from £1 million at the end of 2025 and reversing the £103 million net debt position from June 2025.

Net debt to adjusted EBITDA fell to 1.9 times. This puts leverage back within the target range of 1.5 to 2.0 times for the first time since December 2022.

Liquidity also looks substantial, with £861 million of headroom from deposited cash and undrawn committed facilities.

For investors examining financially stretched construction suppliers, the contrast with the debt and margin issues discussed in SIG's half-year results is worth understanding. Travis Perkins still has operational work ahead, but its financial flexibility has improved materially.

Why has the dividend fallen?

The board proposed an interim dividend of 4.0p per share, down 11.1% from 4.5p. This reflects the policy of distributing 30% to 40% of adjusted earnings.

The dividend is due on 6 November 2026 for shareholders on the register at the close of business on 2 October. The shares are expected to trade ex-dividend on 1 October.

The lower payment is a negative for income-focused investors, particularly when adjusted earnings per share rose by 13.5%. However, the decision also preserves more cash for investment and balance-sheet resilience while markets remain difficult.

What investors should watch next

Management expects second-half market conditions to be comparable with the first half and therefore anticipates a similar trading performance. That is steady guidance rather than a call for an immediate construction recovery.

The key question is whether margin improvements in General Merchant can become large enough to overcome cost inflation and weak volumes. Investors should also watch Toolstation UK's margin progress, the potential Benelux disposal and whether working capital gains prove sustainable.

The first-half figures offer credible signs of better operational control and a substantially stronger financial position. They do not yet show renewed revenue growth or higher underlying operating profit.

The full company filing is available in the original Travis Perkins announcement.