Essential reading for retailers and suppliers in the home improvement market

Travis Perkins delivers strong profit growth in Q1 results

Published: 9 May 2019 - Kiran Grewal

Builders' merchant Travis Perkins reported strong group revenue growth of 4.8%, and 4.9% on a like-for-like basis, in its Q1 results, showing continued market outperformance in the Contracts division and Toolstation, with LFL sales up 19%.

 


Toolstation reported 25% total growth amid network expansion and as existing stores mature, while Wickes grew both core DIY and showroom categories, with a turnaround in kitchen and bathroom performance.

Adjusted operating profit declined by 1.3% while adjusted EPS grew by 3.7%

With Travis Perkins' 2018 half year results reporting a "challenging UK DIY market" negatively impacting sales and profitability in Wickes, the group said it would have significant cost reduction plans underway. With these plans in now progress, H2 adjusted operating profit, excluding property profits, grew by 10.7% underpinned by these activities.

Adjusting items includes a non-cash impairment of £246m against the goodwill in Wickes in H1 and restructuring costs across the Group. Travis Perkins announced in March this year that following a rigorous and wide-ranging selection process John Carter will step down as CEO and from the Travis Perkins Board on August 5 2019. He will be succeeded as CEO by Nick Roberts, currently CEO of Atkins (formerly the business of WS Atkins plc). Mr Roberts will join the business as a director of Travis Perkins and CEO designate on July 1 2019. To ensure a smooth handover, Mr Carter will remain with the Group until the end of 2019.

The group said good progress has been made on the strategic actions set out in December 2018, including simplification through the removal of the divisional structure above the Merchant businesses.

Travis Perkins says the 2019 adjusted operating profit is expected to be similar to 2018.

Chief executive officer, John Carter commented: “The Group delivered a solid performance overall in 2018 despite a challenging market backdrop. We took concerted self-help actions during the year, and the benefits of this cost reduction, together with improved trading, drove an improved profit performance in the second half of the year. In December 2018, we set out our intention to focus on delivering best-in-class service to trade customers and to simplify the Group. To that end, removing the divisional structure within Merchanting will enable an increased focus on customers at a business unit level, speed up decision making and, at the same time, reduce costs. In the longer term, the Group remains focused on generating sustainable profitable growth for shareholders and we will achieve this by allocating capital and resources to our most advantaged businesses. We are making good progress on the preparation for the disposal of the Plumbing & Heating division, and are seeing an encouraging improvement in trading and good momentum in Wickes.

Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term. The Group remains focused on self-help actions to underpin performance in the near term, whilst continuing to invest for the future.”

Comments


(Your email address will not be published)
Already Registered?
Sign In
Not Yet Registered?
Register
Printable View E-mail Bookmark
*

What do you think?


Has there been a greater uptake from retailers sourcing British-made products in the face of Brexit?


Latest reader comments

re: B&Q invites suppliers to pitch at Innovation Open Day

Brian Eacersall
Hi B & Q innovations Team.I have already sent in an e-mail outlining my design using the request to become a supplier route.However I ...

re: Toolstation.com excels in Which? website survey

Muhammad idrees
Good service and price also good...

re: Mike Ashley calls Debenhams administration a “national scandal”

m orourke
How can senior management at debenhams stay in post whilst abdicating their responsibilies to a bunch of consultants to save the buisness ...

re: B&Q and Valspar partnership to "transform the paint market in the UK"

Tony Turner
A bit of context: first decorating undertaken in 1968, have continued to decorate at DIY and professional level ever since, Wife has ...

re: Builder wins Toolstation's prize draw pick-up

Brian Easton
Brilliant delivery, much help from Daniel and Shakil...

Most read stories