Our view First half results were a bit weaker than we expected, on a softer performance in Toolstation. Merchanting delivered well with Trade holding up and taking share and price inflation of +15%, boosting profits against a strong comparator. Toolstation was much weaker than we expected, with a H1 loss of £8m and volumes being hit by a falloff in DIY business. For the full year we would expect consensus FY22 profit to reduce by c.3-5%, as a larger loss from Toolstation Europe (£10m) is factored in and a weaker Toolstation expectation is broadly offset by a strong Merchanting performance. Interim results summary Group H1 revenue increased by 10.3% to £2,535m (LFL +7.9%) with adj. operating profit of £163m (-0.6%) around 4% below our forecast. The property profit of £21m (£17m in H1 2021) was higher than we expected. Merchanting performed relatively well, with LFL sales growth of 11.7% (pricing +15.3% and volume -2%) and an adjusted operating profit margin of 7.9% (H1 2021: 8.2%) and an operating profit +9% up on the prior year. Toolstation was weaker than expected with LFL sales down by 10.6% (volume down by 13.9% and price +9.3%) as retail/DIY normalised despite the Trade end markets holding up; there was also a bigger loss in Europe. Toolstation revenue was down by 4.6% and made an overall loss of £8m in H1. Interim DPS increased from 12.0p to 12.5p. Leverage was 1.75 times (post IFRS16). Outlook comments point to a financial performance for the full year being “broadly in line”, with expectations of a continuing good performance in Merchanting offsetting a weaker than expected performance in Toolstation, with a c.£10m higher loss in Toolstation Europe. Valuation The shares are down by 32% YTD. They trade on modest FY22E PE and EBITDA multiples of c.9 times and c.6 times respectively. They reside on an EV:Sales Multiple of c.0.62 times with forecast operating margins of 6.7% for FY22E.