Travis Perkins plc, parent company of Wickes and Toolstation, has announced its interim results for the six months ended 30 June 2019, and has said there is "good strategic progress underpinned by strong trading performance".
Continuing Group revenue increased by 6.9%, and by 8.0% on a like-for-like basis, primarily driven by volume growth. Continuing Group adjusted operating profit increased by 14.7% to £195m. Travis Perkins reported a strong performance across the Group, with positive trading in Merchanting demonstrating share gains, a strong recovery in Wickes and continued excellent growth in Toolstation.
Travis Perkins has said Toolstation continues to demonstrate excellent growth and, in line with the strategic pillar to focus on advantaged trade businesses, it remains a priority for the deployment of capital. The Group is accelerating the expansion of the branch network to improve convenience, and is further extending the product range including the addition of more trade-focused brands.
Adjusting items of £127m including a £111m asset write off relating to the ERP replacement programme.
Strategic progress has seen the Merchant businesses benefitting from simplification and more empowered branch managers. The process to divest the P&H business ongoing, classified as an asset held for sale.
Decision to demerge Wickes reflecting the Group’s focus on advantaged trade businesses and the simplification of the Group, and have said these cost actions are delivering improved financial performance for the business.
John Carter, Chief Executive Officer, commented: "I am delighted with the progress the Group has made in executing the strategy set out at the capital markets event in December 2018; to focus on our advantaged trade businesses and to simplify the Group. The P&H sales process is well underway, and we are today announcing our intention to demerge Wickes as a separate business.
"This strategic progress has been underpinned by a strong trading period in the first half of 2019 albeit against softer trading conditions in H1 2018. Our trade merchanting businesses have outperformed their markets, through continued focus on delivering excellent customer service, and benefitting from the leaner, lower cost organisation now in place. Toolstation continues to deliver excellent growth through proposition improvements and network expansion. Wickes has delivered a strong turnaround in volume and profit performance, with gains in both core DIY and through the Kitchen & Bathroom showroom.
"Whilst our underlying markets remain subdued, the self-help initiatives underway are supporting an encouraging improvement in performance and provide a strong platform to drive sustainable growth ahead of our markets in the medium term. Despite a cautious outlook for the near-term, the Group remains confident in making progress across the year as a whole."