Buy Travis Perkins despite weak balance sheet

Buy Travis Perkins despite weak balance sheet
Travis Perkins is a market leader in the builders’ merchanting business and through its diy retail business, Wickes.

Both businesses regularly score highly in customer surveys. The business is cyclical as UK house prices veer between soaring in frenzied activity and plunging while volumes drop off a cliff but it will be needed come the next boom.

The group’s vulnerability to the ups and downs of the cycle is exaggerated by high operational gearing (all those branches) and by high financial gearing.

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