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Travis Perkins PLC — Earnings Release 2019
Oct 22, 2019
5270_rns_2019-10-22_4f3ffe48-6bd5-4689-aab7-b8debae39611.pdf
Earnings Release
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22-Oct-2019 / 07:00 GMT/BST
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22 October 2019
Travis Perkins plc Q3 2019 trading update Resilient trading and connued progress in uncertain marketcondions
Highlights
- Merchanng businesses connued to outperform in challenging market condions
- Excellentgrowth in Toolstaon UK;acquision of controllingshare ofToolstaon Europe
- Strong Wickes performance across both core DIYand K&B; demerger on track for Q2 2020
- P&H divestment paused primarily due to market uncertainty
| Group | ||||||
|---|---|---|---|---|---|---|
| Q3 2019 salesgrowth | Merchanng | (1) Toolstaon | (1) Retail (2) |
(exc. P&H) P&H | (1) Group | |
| Like-for-like salesgrowth | 1.6% | 15.4% | 9.7% | 4.3% | - | 3.4% |
| Net change in space | (0.6)% | 5.9% (1.4)% | (0.2)% (2.6)% (0.8)% | |||
| Trading days | 1.6% | - | - | 1.1% | 1.6% | 1.2% |
| Total salesgrowth | 2.6% | 21.3% | 8.3% | 5.2% (1.0)% | 3.8% | |
| Two-yearLFLgrowth | 5.9% | 25.1% | 1.8% | 6.0% 14.8% | 7.7% | |
| Group | ||||||
| YTD 2019 salesgrowth | Merchanng | (1) Toolstaon | (1) Retail (2) |
(exc. P&H) P&H | (1) Group | |
| Like-for-like salesgrowth | 4.7% | 16.6% | 9.7% | 6.7% (2.7)% | 4.7% | |
| Net change in space | (0.7)% | 5.7% (1.1)% | (0.3)% (3.1)% (1.1)% | |||
| Trading days | - | - | - | - | - | - |
| Total salesgrowth | 4.0% | 22.3% | 8.6% | 6.4% (5.8)% | 3.6% |
Nick Roberts, Chief Execuve, commented:
"Now in my third month since taking over as CEO of the Group, I have spent a considerable amount of me in our branches, learning about our businesses and our markets from colleagues, customers and suppliers. This has confirmed my inial impressions that our businesses are well posioned to compete strongly and win greater share in their markets in the future. I am parcularly impressed by the quality of our teams and their commitment to excellent customer service. The plan to simplify the Group's por)olio 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 allocaon to our advantaged trade-focused businesses.
The Group delivered a solid performance in Q3, despite trading condions becoming incrementally more challenging through the course of the summer as a result of the on-going market uncertainty. Though the Group maintains a cauous outlook for the near-term, full year performance remains in line with ourexpectaons."
Business performance
Total Group sales grew by 3.8% in Q3, and by 3.4% on a like-for-like basis. There was one addional trading day in the quarter, bringing the number of trading daysyear-to-date in line with 2018. Across the Group, year-to-date sales price inflaon has been lower than in previous years, ataround 1.5%, primarily concentrated in the merchanng businesses.
Despite the wider building materials distribuon market soAening since mid-year, the Group's Merchanng businesses delivered like-for-like growth of 1.6%. Travis Perkins, the general mixed merchant, showed encouraging like-for-like growth of 2% demonstrangconnued market share gains, parcularly in heavyside categories. The larger commercial construcon market has been more challenging in the quarter, with the specialist merchants delivering modest growth, primarily driven by price inflaon. Pressure on sales volume has been exacerbated by the connued supply restricons on plasterboard materials in CCF, although the situaon is steadily improving. The P&H business connues to perform well, with good like-for-like growth in higher-margin branch network sales offset by lower revenues in the wholesale business.
Toolstaon connued its impressive like-for-like and total sales growth, underpinned by the connued expansion of the UK branch network to over 370 branches,and asuccessful further extension of trade-focused ranges which are helpingto increase sales density. Further enhancements in customer proposion, such asa 5-minute click & collect service,are improvingconvenience forcustomers.
The Retail segment achieved like-for-like sales growth of 9.7%, with total sales growth of 8.3%.The strong performance of Wickes connued 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 connue to benefit from a strong trading plan with targeted promoonal acvity, the success of the "online-in-store" orderingservice, which is improving customer access to an extended range of products, and the connued aHracon of the TradePro scheme to small trade customers. K&B sales remain robust, with increasing lead generaon through digital channels, good sales conversion and increasing proporon of installaon services.
Strategic progress
The process to demerge Wickes from the Travis Perkins Group is on track, both in terms of the separaon 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 & Heang business for the me being. In the quarter, the Group acquired a controlling share of the Toolstaon Europe business which will enable the Group to accelerate investments to expand the Toolstaon network in Europe in the comingyears.
The Group remains on target to achieve its planned cost reducons in 2019, with acons idenfied oralready underway to achieve £20m to £30m 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 forcustomers.
Investor/ analyst enquiries: Media enquiries:
| Graeme Barnes | Zak Newmark | David Allchurch |
|---|---|---|
| +44 (0) 7469 401819 | +44 (0) 7384 432560 | Harry Cameron |
| [email protected] [email protected] +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 13week period ended 28 September 2019 compared to the 13 week period ended 29 September 2018. Tile Giant l ike-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 LEICode: 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
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