Travis Perkins Group produced a positive performance in 2019 against a challenging market backdrop, with early signs of progress from the strategic initiatives set out in December 2018.
Total Group revenues grew by 3.2% in 2019 to £6,956 million, and by 3.8% on a like-for-like basis. Sales growth was driven by a good performance from the merchant businesses despite the challenging market environment, with continued growth in Toolstation and a strong recovery in Wickes. The P&H business recorded a modest reduction in sales across the year, but this reduction was concentrated in the lower margin wholesale business, whilst the branch-based business continued to grow.
Adjusted operating profits grew to £442m, an increase of 7.8% when compared to the 2018 illustrative comparative (including the impact of IFRS 16). The increase of £32m was driven by improvements in all segments, with the biggest increase coming from the strong recovery in Wickes. Toolstation UK also grew profits strongly, but this was offset by the consolidation of Toolstation Europe in Q4, and the corresponding losses of around £4m. The transformation of P&H continued to make good progress, improving the balance of business and improving margins.
Nick Roberts, chief executive officer, commented: "Against a challenging market backdrop we have delivered a strong operational and financial performance across the Group. Our merchanting businesses gained market share as a result of a range of initiatives to improve our customer proposition, including increased local empowerment for our branch managers, while the pace of the Toolstation expansion accelerated.
"The actions put in place to improve our Wickes and Plumbing & Heating businesses meant that both recovered well during the year and made positive contributions towards the Group's overall performance.
"Our strategic progress in 2019 has been significant, but there remains much work to do in order to build stronger foundations for the Group to deliver enhanced returns and long-term growth. Our immediate priorities are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further simplification of our business and successful delivery of the demerger of Wickes.
"The long-term fundamental drivers of the Group's end-markets remain strong, and our businesses enjoy leading positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen some green shoots of recovery in our lead indicators, although it remains too early to point towards any tangible improvement in RMI. The Group remains focused on delivering against our key priorities, and we are optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and deliver improved returns for our shareholders."