Travis Perkins plc Q3 2019 trading update: Resilient trading and continued progress in uncertain market conditions (893631)
October 22 2019 - 1:00AM
UK Regulatory
Travis Perkins (TPK)
Travis Perkins plc Q3 2019 trading update: Resilient trading and continued
progress in uncertain market conditions
22-Oct-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
22 October 2019
Travis Perkins plc Q3 2019 trading update
Resilient trading and continued progress in uncertain market conditions
Highlights
· Merchanting businesses continued to outperform in challenging market
conditions
· Excellent growth in Toolstation UK; acquisition of controlling share of
Toolstation Europe
· Strong Wickes performance across both core DIY and K&B; demerger on
track for Q2 2020
· P&H divestment paused primarily due to market uncertainty
Q3 2019 sales Merchanting(1) Toolstation(1) Retail(2) Group P&H(1) Group
growth
(exc.
P&H)
Like-for-like 1.6% 15.4% 9.7% 4.3% - 3.4%
sales growth
Net change in (0.6)% 5.9% (1.4)% (0.2)% (2.6)% (0.8)%
space
Trading days 1.6% - - 1.1% 1.6% 1.2%
Total sales 2.6% 21.3% 8.3% 5.2% (1.0)% 3.8%
growth
Two-year LFL 5.9% 25.1% 1.8% 6.0% 14.8% 7.7%
growth
YTD 2019 Merchanting(1) Toolstation(1) Retail(2) Group P&H(1) Group
sales growth
(exc.
P&H)
Like-for-like 4.7% 16.6% 9.7% 6.7% (2.7)% 4.7%
sales growth
Net change in (0.7)% 5.7% (1.1)% (0.3)% (3.1)% (1.1)%
space
Trading days - - - - - -
Total sales 4.0% 22.3% 8.6% 6.4% (5.8)% 3.6%
growth
Nick Roberts, Chief Executive, commented:
"Now in my third month since taking over as CEO of the Group, I have spent a
considerable amount of time in our branches, learning about our businesses
and our markets from colleagues, customers and suppliers. This has confirmed
my initial impressions that our businesses are well positioned to compete
strongly and win greater share in their markets in the future. I am
particularly impressed by the quality of our teams and their commitment to
excellent customer service. The plan to simplify the Group's portfolio of
businesses remains the right one, with good progress made through the
quarter towards reducing cost and complexity and enabling greater focus and
more disciplined capital allocation to our advantaged trade-focused
businesses.
The Group delivered a solid performance in Q3, despite trading conditions
becoming incrementally more challenging through the course of the summer as
a result of the on-going market uncertainty. Though the Group maintains a
cautious outlook for the near-term, full year performance remains in line
with our expectations."
Business performance
Total Group sales grew by 3.8% in Q3, and by 3.4% on a like-for-like basis.
There was one additional trading day in the quarter, bringing the number of
trading days year-to-date in line with 2018. Across the Group, year-to-date
sales price inflation has been lower than in previous years, at around 1.5%,
primarily concentrated in the merchanting businesses.
Despite the wider building materials distribution market softening since
mid-year, the Group's Merchanting businesses delivered like-for-like growth
of 1.6%. Travis Perkins, the general mixed merchant, showed encouraging
like-for-like growth of 2% demonstrating continued market share gains,
particularly in heavyside categories. The larger commercial construction
market has been more challenging in the quarter, with the specialist
merchants delivering modest growth, primarily driven by price inflation.
Pressure on sales volume has been exacerbated by the continued supply
restrictions on plasterboard materials in CCF, although the situation is
steadily improving. The P&H business continues to perform well, with good
like-for-like growth in higher-margin branch network sales offset by lower
revenues in the wholesale business.
Toolstation continued its impressive like-for-like and total sales growth,
underpinned by the continued expansion of the UK branch network to over 370
branches, and a successful further extension of trade-focused ranges which
are helping to increase sales density. Further enhancements in customer
proposition, such as a 5-minute click & collect service, are improving
convenience for customers.
The Retail segment achieved like-for-like sales growth of 9.7%, with total
sales growth of 8.3%. The strong performance of Wickes continued in Q3, with
further market share gains in the Home Improvement market through core DIY
categories and in the Kitchen & Bathroom showroom (K&B). Core DIY sales
continue to benefit from a strong trading plan with targeted promotional
activity, the success of the "online-in-store" ordering service, which is
improving customer access to an extended range of products, and the
continued attraction of the TradePro scheme to small trade customers. K&B
sales remain robust, with increasing lead generation through digital
channels, good sales conversion and increasing proportion of installation
services.
Strategic progress
The process to demerge Wickes from the Travis Perkins Group is on track,
both in terms of the separation of the business from the Group to increase
its autonomy and the regulatory process required. The Group aims for the
demerger to be completed in Q2 2020. Given the current unprecedented level
of uncertainty, we have decided to pause the sale process of the Plumbing &
Heating business for the time being. In the quarter, the Group acquired a
controlling share of the Toolstation Europe business which will enable the
Group to accelerate investments to expand the Toolstation network in Europe
in the coming years.
The Group remains on target to achieve its planned cost reductions in 2019,
with actions identified or already underway to achieve GBP20m to GBP30m of
annualised savings by mid-2020 which will reduce complexity, lower the
above-branch cost base and speed up decision making, and improve service
levels for customers.
Investor / analyst enquiries: Media
enqui
ries:
Graeme Barnes Zak Newmark David
Allch
urch
+44 (0) 7469 401819 +44 (0) 7384 432560 Harry
Camer
on
graeme.barnes@travisperkins.co.uk zak.newmark@travisperkins.co.uk +44
(0)
207
353
4200
Footnotes
(1) Like-for-like and total sales growth for the three month period ended 30
September 2019 compared to the three month period ended 30 September 2018.
(2) Wickes like-for-like and total sales growth for the 13 week period ended
28 September 2019 compared to the 13 week period ended 29 September
2018.Tile Giant like-for-like and total sales growth for the three month
period ended 30 September 2019 compared to the three month period ended 30
September 2018.
ISIN: GB0007739609
Category Code: QRT
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 24125
EQS News ID: 893631
End of Announcement EQS News Service
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