Bottom Line: Perky Perkins

AN 83 per cent rise in pre-tax profits at Travis Perkins was flattered by property disposals and the disposal of an interest rate swap taken out when AAH's builders merchant division was acquired.

Even so, these were excellent figures. The underlying business is growing and AAH is being bedded in nicely, with margins double last year's and almost matching the group's return on sales.

The rate of cash inflow was even more impressive than the jump in pre-tax profits from pounds 9.3m to pounds 17.1m, a 90 per cent rise in earnings per share to 11.2p and the 12 per cent dividend rise to 2.8p. With pounds 45m having been spent on AAH in March, it seems likely debt could be eliminated by the end of next year.

Having fallen 20 per cent since the beginning of the year, the shares have held up slightly better than many of Travis's peers in an unfashionable sector. But underlying pre-tax profits of pounds 31.5m this year and pounds 39.2m next time put the shares on a prospective p/e of only 12 - undemanding for a financially prudent business with organic growth still to come.

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