Travis Perkin’s latest annual results reveal a strong year for its consumer division - which includes Wickes, Toolstation, bathrooms.com and Tile Giant - with a 6.5% like-for-like growth in revenue.
Total sales in the consumer division were up 9.5% for the year ended December 31, 2016, with an operating profit increase of 6.4% to £101m for the trading period.
The continued roll-out of the new Wickes store format, featuring improved kitchen and bathroom displays and design centre, helped buoy the figures, with 46 new outlets opening during the year, bringing the total number of new-format stores to 62. Further roll-outs of the new-format stores are planned for the coming year.
Online was also a key driver, with Wickes posting over £100m in internet sales in 2016, no doubt helped by continued development of its online proposition, with enhancements to its delivery and click & Collect services.
Savings were made over the course of the year with the rationalisation of the Wickes distribution centre network, taking it down to a single centre in Northampton, which now serves all store and direct to customer deliveries.
The Toolstation network also continued to expand in 2016, with a further 36 stores opening in the UK, and seven shops in the Netherlands. Online-only ranges were introduced for the first time, with over 1,000 products available to customers, along with improved marketing campaigns. Further online range extension is planned in 2017 and the store opening programme will accelerate further in the Netherlands.
Sales across the whole group, including the 650-strong Travis Perkins chain, which sits in its general merchanting division, were up 4.6% to £6,217m for the year, 2.7% on a like-for-like basis, while it’s adjusted pre-tax profit was flat at £381m (2015: £382m). Adjusted operating profit was £409m, down 1% on the previous year.
An exceptional non-cash impairment charge of £235m was taken against the goodwill and intangible and tangible assets, principally in the plumbing & heating and tile businesses , while an exceptional charge was also taken to the income statement of £57m to cover the previously-announced closure of underperforming branches, supply chain rationalisation and central restructuring across businesses in the group.
Travis Perkins CEO John Carter said of the results: “2016 was another solid year for the Group, with continued strong performances from the consumer, contracts and general merchanting divisions, which together contributed 90% of Group adjusted operating profit. These businesses continued to benefit from the investments made in the branch network and customer propositions over the last three years, which provides a strong base for future growth. It was a much more difficult year for the Plumbing & Heating division driven by structural challenges for traditional merchant businesses in this segment. Whilst the network restructuring work carried out in 2014 and 2015 created a more focused branch network, further work is required and over the next six months we will be exploring all routes to enhance returns. There are improvements we can make to the ranges we offer to our customers, our availability, our online presence and our service proposition."