Our view Trading conditions have clearly remained weak, with Merchanting seeing a deterioration in Q2 impacting gross margins and profits. Toolstation UK has delivered broadly as expected. The Group is lowering profit guidance for the full year; while not a complete surprise, the scale of the reduction is greater than expected. We would expect consensus full year profit expectations to be cut by around 10-12%. It is also disappointing not to see any definitive news on France, although it seems it is just practically taking time to close and exit this business, with an exit expected by the end of 2024. Toolstation Benelux looks to be retained within the Group, which may surprise some. Results summary A weak H1 together with a profit warning for the full year. A continuation of trends seen in H2 2023 in H1 2024 led to H1 revenue of £2,362m, down by 4.4%. LFL revenue was down by c.5%, equally on weak volumes (-2.4%) and price deflation (-2.6%). Group adjusted operating profit fell by 33% to £75m, which was lower than our forecast of £82m. Merchanting was weaker than expected with profits down from £130m to £91m (-30%) with a margin of 4.7% and a worse Q2 (LFL sales –7.9%) versus Q1 (LFL -4.2%). Group saw continued market share gains in Toolstation UK with LFL sales up 0.7% and with the operating margin up 130bps and Toolstation UK saw operating profits improve to £14m (+55%). Underlying EPS down by 48% to 15.9p with the interim DPS at 5.5p, down by 56%. Net debt reduced by £54m, but leverage increased to 2.7 times. Full year profit guidance is reduced to £150m (Inclusive of £5-10m of property profits and c.£16m losses in Toolstation France) from a previous range of £160m to £180m. On track to exit Toolstation France by the end of 2024. Strategic review of Toolstation Benelux complete with actions in place to break-even performance in 2025. New CEO joins in September. Valuation Shares are flat over the last twelve months and on our existing forecasts reside on a FY25E PE of c.14 times with a dividend yield of c.2.8%.