Summary of H122 results Sales came in line with consensus whereas adjusted operating profit (ex-property gains) came in at GBP103m which was -7% below VA consensus. This was driven by additional GBP7m of costs in Toolstation associated with the new Pineham distribution centre in the UK and slightly lower property profits relative to expectations. Merchanting performed in line with market expectations. Key news The group had already downgraded FY23 profit guidance to GBP240m on 16th June on the back of weakness in residential RMI and new build markets. Visibility here remains low - especially in 2024. Commercial, industrial, and public markets have held up better. Pricing in merchanting has come down slightly ahead of expectations due to weakness in commoditised inventory - namely timber. Toolstation''s profitability should improve as the Netherlands reaches breakeven although the GBP30m loss expected in Europe could be a touch lower. Leverage has crept up beyond management''s target range to 2.1x (target: 1.5x to 2.0x) which is primarily a result of leases for the new Toolsation distribution centre. Management are relaxed about this and see financial leverage as being under control with net debt / EBITDA of 0.8x ex-leases. Earnings We tweak our earnings estimates by +2% / +1% for 2023 / 2024 after incorporating today''s results and comments on the call. We now sit -4% below FY24 consensus operating profit. Rating and target price We reiterate our Underperform rating and leave our target price unchanged at GBPp810. We continue to see a bumpy road ahead on the back of UK macro risks as documented here. Investment case UK macro risks are mispriced after the recent rally.