Travis Perkins plc Q3 2019 trading update: Resi...
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Travis Perkins (TPK)
22 October 2019 Travis Perkins plc Q3 2019 trading update Resilient trading and continued progress in uncertain market conditions Highlights
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 Nick Roberts, Chief Executive, commented: "Now in my third month since taking over as CEO of the Group, I have spent a considerable amount of time in our branches, learning about our businesses and our markets from colleagues, customers and suppliers. This has confirmed my initial impressions that our businesses are well positioned to compete strongly and win greater share in their markets in the future. I am particularly impressed by the quality of our teams and their commitment to excellent customer service. The plan to simplify the Group's portfolio of businesses remains the right one, with good progress made through the quarter towards reducing cost and complexity and enabling greater focus and more disciplined capital allocation to our advantaged trade-focused businesses. The Group delivered a solid performance in Q3, despite trading conditions becoming incrementally more challenging through the course of the summer as a result of the on-going market uncertainty. Though the Group maintains a cautious outlook for the near-term, full year performance remains in line with our expectations." Business performance Total Group sales grew by 3.8% in Q3, and by 3.4% on a like-for-like basis. There was one additional trading day in the quarter, bringing the number of trading days year-to-date in line with 2018. Across the Group, year-to-date sales price inflation has been lower than in previous years, at around 1.5%, primarily concentrated in the merchanting businesses.  Despite the wider building materials distribution market softening since mid-year, the Group's Merchanting businesses delivered like-for-like growth of 1.6%. Travis Perkins, the general mixed merchant, showed encouraging like-for-like growth of 2% demonstrating continued market share gains, particularly in heavyside categories. The larger commercial construction market has been more challenging in the quarter, with the specialist merchants delivering modest growth, primarily driven by price inflation. Pressure on sales volume has been exacerbated by the continued supply restrictions on plasterboard materials in CCF, although the situation is steadily improving. The P&H business continues to perform well, with good like-for-like growth in higher-margin branch network sales offset by lower revenues in the wholesale business. Toolstation continued its impressive like-for-like and total sales growth, underpinned by the continued expansion of the UK branch network to over 370 branches, and a successful further extension of trade-focused ranges which are helping to increase sales density. Further enhancements in customer proposition, such as a 5-minute click & collect service, are improving convenience for customers. The Retail segment achieved like-for-like sales growth of 9.7%, with total sales growth of 8.3%. The strong performance of Wickes continued in Q3, with further market share gains in the Home Improvement market through core DIY categories and in the Kitchen & Bathroom showroom (K&B). Core DIY sales continue to benefit from a strong trading plan with targeted promotional activity, the success of the "online-in-store" ordering service, which is improving customer access to an extended range of products, and the continued attraction of the TradePro scheme to small trade customers. K&B sales remain robust, with increasing lead generation through digital channels, good sales conversion and increasing proportion of installation services. Strategic progress The process to demerge Wickes from the Travis Perkins Group is on track, both in terms of the separation of the business from the Group to increase its autonomy and the regulatory process required. The Group aims for the demerger to be completed in Q2 2020. Given the current unprecedented level of uncertainty, we have decided to pause the sale process of the Plumbing & Heating business for the time being. In the quarter, the Group acquired a controlling share of the Toolstation Europe business which will enable the Group to accelerate investments to expand the Toolstation network in Europe in the coming years. The Group remains on target to achieve its planned cost reductions in 2019, with actions identified or already underway to achieve £20m to £30m of annualised savings by mid-2020 which will reduce complexity, lower the above-branch cost base and speed up decision making, and improve service levels for customers.
Footnotes (1) Â Like-for-like and total sales growth for the three month period ended 30 September 2019 compared to the three month period ended 30 September 2018. (2) Wickes like-for-like and total sales growth for the 13 week period ended 28 September 2019 compared to the 13 week period ended 29 September 2018.Tile Giant like-for-like and total sales growth for the three month period ended 30 September 2019 compared to the three month period ended 30 September 2018. |
| ISIN: | GB0007739609 |
| Category Code: | QRT |
| TIDM: | TPK |
| LEI Code: | 2138001I27OUBAF22K83 |
| OAM Categories: | 3.1. Additional regulated information required to be disclosed under the laws of a Member State |
| Sequence No.: | 24125 |
| EQS News ID: | 893631 |
| Â | |
| End of Announcement | EQS News Service |
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