* CEO says UK DIY market has overcapacity
* CEO says may buy just 1 or 2 Focus DIY stores
* 4 months to April 30 turnover up 5.9 percent
* Gross margins up in Wickes, BSS, down in merchanting
* Shares down 0.9 percent
(Adds detail, CEO, analyst comment, shares)
By James Davey
LONDON, May 9 (Reuters) - British builders' merchant and do-it-yourself retailer Travis Perkins said the UK DIY market was suffering from overcapacity as it posted a rise in sales thanks to market share gains.
CEO Geoff Cooper said on Monday the firm would not buy many stores from stricken rival Focus DIY because he believed there was already too much capacity in the UK DIY market.
"Any DIY retailer that's going to be acquiring space needs to really cherry pick the very top performing branches, so I wouldn't expect us to go and buy a whole load of Focus stores," he told Reuters, adding: "There might be one or two that we're interested in."
Focus DIY, which trades from 178 UK stores, went into administration last Thursday. On Friday B&Q owner Kingfisher purchased 31 stores from the administrator for 23 million pounds ($37.70 million).
Travis Perkins, which trades from 1,827 branches across the UK, reported a 5.9 percent increase in revenue for the four months to April 30 as it picked up market share from rivals.
"The market share's coming from pretty much everyone in the market," Cooper said, highlighting better quality products and availability, along with improved customer service.
Travis Perkins also trades as Keyline, CCF, City Plumbing, Benchmarx and BSS, competing with groups such as Wolseley, and owns Tile Giant and Wickes, competing with the likes of B&Q and Home Retail's Homebase.
Prior to Monday's update, shares in Travis Perkins had risen by a over third in the past year as the market welcomed its 799 million pounds purchase of plumbing and heating group BSS Group, a deal completed in December.
The stock was down 0.9 percent at 1,077 pence at 0846 GMT, valuing the business at about 2.6 billion pounds.
"The combination of strong core Travis Perkins operations, good management, plus the addition of the BSS business presents good opportunities for the group going forward," said Panmure Gordon analyst Andy Brown.
Revenue at depots open over a year was up 12.8 percent at its builders merchanting division over the four month period, although growth slowed to 10.4 percent in the latter two months.
At Wickes like-for-like sales were up 1.9 percent over four months but down 1.2 percent over the last nine weeks, while at BSS like-for-like turnover rose 2.3 percent.
Gross margins improved at Wickes and BSS but were down in merchanting, reflecting higher product inflation, and the firm said it was on track to cut year-end debt to 650 million pounds.
Cooper said he expected very low single digit growth in the overall UK merchanting market in 2011 and a mid single digit contraction in the overall UK DIY market.
(Editing by Will Waterman and Andrew Callus) ($1=.6100 Pound)