Guiding an FY24 outturn of £150m vs GBS at £155m and cons at £169m Travis Perkins has published H1 results reporting an EBITA of £38m (-64.5% yoy). At a Group level, lfl sales weakened in Q2 (-6.1%) versus Q1 (-3.7%) with merchanting lfl sales -7.9% in Q2 versus -4.2% in Q1 and Toolstation lfl sales +2.2% in Q2 versus -0.9% in Q1. Travis Perkins notes weak demand generally across its key end markets which has been coupled with commodity price deflation. The Group has made “good progress” in addressing loss-making activities and expects to exit Toolstation France by year-end whilst a strategic review of Toolstation Benelux is said to be complete with actions in place to deliver break-even performance in 2025. Although the financial performance is expected to improve in 2025 (new UK government will encourage more house building and infrastructure improvements coupled with reducing interest rates and self-help), H224 will remain challenging and Travis Perkins expects demand in H2 to be similar to that in H1. With that in mind, management is guiding for an FY24 adjusted operating profit of c.£150m, which includes £5-10m of property profits and a loss of c.£16m in Toolstation France. We will downgrade our forecast of £155m by £5m while consensus currently stands at £169m and thus the downgrade to consensus will be in the order of 11%. Lower volumes and deflation lead to weaker merchanting margin In terms of the results themselves, revenue came in at £2.36bn (-4.4% yoy). This was due to a 5.8% decline in revenue in the merchanting division to £1.94bn whilst Toolstation revenue increased by 2.4% to £420m. Post adjusting items of £32m (of which £10m is cash), Travis Perkins delivered a statutory operating profit of £38m. Divisionally, lower volumes and price deflation impacted merchanting gross margins and saw operating margins taper by 160bps yoy whilst Toolstation UK actually delivered a margin improvement of 130bps performance (but as expected there was a loss in Toolstation Europe of c.£4m). Leverage at year-end increased to 2.7x, up from 2.1x in H123. Conference call details Management will host an in-person presentation at 8:30am. Alternatively, a webcast can be accessed via the investor relations website.