Published on 24 - February - 2010
Travis Perkins sees 2009 retail profits soarTravis Perkins has seen group revenue decline by 8% yet its retail arm continues to grow, according to preliminary results released today.
Travis Perkins' retail division has reported soaring profits for 2009
Group revenue has fallen from £3,179m in 2008 to £2,931m in the 12 months to 13 December 2009.
However, the retail division, largely made up of Wickes, saw total sales increase by 4.3% from £940.7m to £980.7m with lfl sales increasing by 3.2% in the period.
This increase came despite the general economic uncertainty, following relatively stronger market conditions as consumers found their discretionary spending power had gone up.
The report put this down to reductions in mortgage costs, utility bills and other elements of their non-discretionary spend.
Wickes' pre-tax profits soared from £10.2m to £57m in 2009. Lfl sales for the full year of Wickes' core products were down only slightly by 0.8%, but kitchen and bathroom lfls were ahead by 27.7%, boosted largely by the demise of MFI in 2008.
The report said: "Wickes' strong kitchen and bathroom (K&B) sales performance reflects Wickes' initiative to capture market share following the withdrawal from the market in late 2008 of a significant K&B competitor. Wickes enjoyed great success with this initiative, exceeding its targets for share gain and taking more share than its overall market presence."
The report also stated that the success of Wickes' "refreshed commercial strategy" has led to market share gains, profit growth and an expanded operating margin.
Despite ending the year in what they claim to be strong position, Travis Perkins remains cautious about the year ahead.
The report said: "We are concerned in particular about weak consumer spending trends in 2010 as inflation rises and the cushion of falling mortgage costs annualises out. We expect the home improvement market to contract further in 2010, but with only limited benefit from competitors going out of business in contrast to the large capacity reductions seen in 2009."
So far Travis Perkins' 2010 performance has been slightly below par, with group lfls down 2.7% for the seven weeks to 20 February. For the same period, retail division lfls were down by 2.4% with core product sales down 8% and kitchen and bathroom sales up 23.3%.
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