Travis Perkins plc has revealed a strong set of results for the year ended 31 December 2019.
Total Group revenue for the year was recorded as £6,955m (2018: £6,742m) and broken down as follows:
Merchanting (Travis Perkins, Keyline, Benchmarx, CCF, BSS): £3,703m (2018: £3,609m)
Plumbing & Heating (City Plumbing, PTS, etc): £1,465m (2018: £1,528m)
Toolstation: £445m (2018: £354m)
Retail (Wickes & Tile Giant): £1,342m (2018: £1,250m)
Deducting the Retail element, total revenue in its trade / broader merchant categories equates to £5,613m (2018: £5,491m).
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.”
He continued: “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.”
Plans to divest the Wickes business (despite its own strong performance) are said to remain on track for Q2 of this year with the Group targeting an EGM at the end of April. Equally, whilst the Group has seen “increasing profitability” in its Plumbing & Heating business and has sold off its Primaflow F&P wholesale arm, it states that it maintains an “intention to divest P&H — but only at the right value for shareholders”.
Under a banner of ‘Focus on Trade, Simplify the Group’, the results presentation outlined the following ‘Current key priorities’:
- Successful demerger of Wickes
- Continue regeneration of Travis Perkins
- Accelerate expansion of Toolstation
- Delivering an organisational platform which is fit for the future
Selected financial highlights:
- Like-for-like revenue growth of 3.8% with total revenue growth of 3.2%
- Good growth in the Merchant businesses despite challenging market conditions, continued excellent growth in Toolstation and a strong recovery in Wickes
- Adjusted operating profit growth of 7.8% driven by Wickes recovery, the transformation programme in P&H and the positive impact of cost reduction activities
- Merchant businesses outperformed challenging end-markets, benefitting from business simplification and greater local empowerment
- Acceleration of Toolstation UK expansion continued with 65 new branches opened and the acquisition of a controlling share of Toolstation Europe
- Process to demerge Wickes well progressed, due for completion in Q2 2020
- Process to divest the P&H business paused during period of significant uncertainty, sale of the PF&P wholesale business completed in January 2020
- Cost reduction actions on track; streamlining above-branch operations and increasing the agility of the Group