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TWST: Can we set the context with a quick introduction to Travis Perkins (London: TPK.L)?

Mr. Hampden-Smith: Travis Perkins is listed on the London Stock Exchange and is capitalized at about 1.4 billion, making us about the 120th largest public company. Our core activity is the supply of materials to the jobbing builder, which is someone doing repair maintenance and improvement on people's homes. We've got about 700 branches nationwide and 200,000 customers. We have quite low average transaction value of about £65, so there are lots of small transactions. The strengths that we really have to score ourselves on are service quality, stock availability, and delivery on time; we very much manage our business on non-price factors.

TWST: Do you have any exposure to the new-build sector or is it all repair and improvement?

Mr. Hampden-Smith: We do. The majority of the business is repair, maintenance and improvement, but new-build represents somewhere around 30% to 35%, of which maybe about 25% is house building and another 10% in the commercial/industrial/government sectors.

TWST: How would you describe your position on the competitive landscape?

Mr. Hampden-Smith: We are one of the Big 3 – Wolseley, Dewsons, and Travis Perkins -- who combined have around about half of the market in the UK. That 50% is fairly equally split between the three of us. The remaining 50% is reasonably fragmented. It drops down to Grafton at 8% marketshare and then it drops pretty quickly from there. We grow our top line from acquisition, and grow our bottom-line, or the margins, on the organic side. So, we are not chasing after volume on the organic side; we're just aiming to maintain our market share and improve the profitability, and then gain market share from acquisitions.

TWST: How would you characterize the general condition of the repair and maintenance space at the moment?

Mr. Hampden-Smith: It's been a good year. We have had record warm weather in the spring, which is very good for areas such as paving and landscaping. We've got a culture here where there are a lot of television programs that give people advice and examples of how they can improve their homes. They are actually very popular and that level of exposure is good for business. The other issue we have is outdated housing stock over here. There was a government report recently which states that one-third of the 21 million houses in the UK are below an acceptable standard. Five years ago, that figure was 45%, and you can probably read it several ways, but, regardless, it does highlight that we are below what you deem a decent standard of home. A lot the problems are in areas such as insulation, and that has proven to be quite a good underpinning to the market over here. A final issue is that there are not enough new houses being built to fulfill demand. We need 200,000 a year, but only 150,000 are being built. And although we are catching up on the quality of the existing housing stock, there is still quite a way to go.

TWST: Can you walk us through the next 12 to 24 months at Travis Perkins and give a general sense of the milestones and objectives you will be homing in on?

Mr. Hampden-Smith: We have gone to press saying we are targeting average adjusted double-digit earnings growth; in other words, over a period, at least 10% earnings growth. To achieve that, we need a reasonable market -- something like 2% volume, 2% price – and we need to add about 50 or 60 outlets per annum. We have added about 100 outlets in each of the last two years, so providing the market remains reasonable, we should be able to expand the number of outlets and improve our buying terms. In truth, it's a grinding-type story. It's more of the same because we are successful at it. We have good contacts in the UK and we know the market. It's a successful formula and we have only about 15% of the market, so why change it? Why rush abroad? It's going very nicely, there is significant opportunity out there, and there are some 2000 independent merchants out there for potential acquisition.

TWST: Can you summarize Travis Perkins with three or four of the best reasons why a potential investor should take a closer look at your stock?

Mr. Hampden-Smith: We are reliable. We have met our targets and expectations over the last few years. We have the experience. We are a known top management team who has all been in the business for a while. We've got plenty of opportunities to expand, so the growth potential is there. And we've got industry record margins and industry record return on capital.