Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

UPDATE 2-Travis Perkins in 300 mln pounds cash call

Published 05/11/2009, 02:55 AM
Updated 05/11/2009, 03:00 AM

* Seven for 10 rights issue at 365p/share fully underwritten

* Proceeds will be partly used to reduce 985 mln pounds debt

* Expects markets to continue to weaken until Q3 2009

* Says year-to-date performance ahead of board expectations (Adds detail)

By James Davey

LONDON, May 11 (Reuters) - Travis Perkins Plc, the British builders merchant and DIY group, announced a fully underwritten 300 million pound ($439.8 million) rights issue to reduce its debt burden and allow it to take advantage of acquisition opportunities.

The firm also said on Monday that it expected its markets to continue to weaken until the third quarter of 2009.

Travis said the issue of 85,903,379 new shares was being made on the basis of seven new shares for every 10 existing shares at a price of 365 pence a share, a discount of 51.6 percent to Travis's closing price on Friday.

It said proceeds from the fundraising would partly be used to reduce its net debt, which stood at 984.6 million pounds at March 31.

"The rights issue will strengthen the group's balance sheet during the current uncertain trading and macro-economic times, as well as position the group to be ready to take advantage of, and capitalise on, opportunities when markets eventually recover," said Chief Executive Geoff Cooper.

He added that while the group remains and expects to remain within its banking covenants, the rights issue will provide additional headroom.

Travis, which trades from more than 1,200 branches across the UK under the Travis Perkins, Wickes and other brand names, also updated on current trading.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

It said its year-to-date overall financial performance was ahead of the board's expectations, with market trends broadly in line with the group's forecast for the recession.

Group revenue for the four months to April 30 was down 13.6 percent, with like-for-like sales down 14.4 percent.

Like-for-like revenue in Travis' merchanting division fell 19.0 percent.

Retail like-for-like sales on an ordered basis were down 1.6 percent for the 18 weeks to May 2.

Shares in Travis Perkins have lost a quarter of their value over the last year, but have increased by 43 percent over the last month.

The stock closed on Friday at 753.5 pence, valuing the business at 925 million pounds. (Editing by Mark Potter; Editing by Rupert Winchester)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.