In its full year results for the twelve months ended 31st December 2020, Travis Perkins plc has reported “resilient trading amidst significant uncertainty”.
Following the unprecedented challenge of the coronavirus crisis, the Group notes the “robust recovery” during the second half of the year in its Merchanting and Plumbing & Heating segments, driven by strong RMI demand.
In its Retail segment, Wickes was said to be taking market share in its core DIY category, with like for like revenue growth of 19.3%. Having been put on pause by Covid-19, the demerger process for the business has now recommenced with the prospectus and circular set to be issued in late March (subject to FCA approval).
Toolstation’s “strong outperformance” was maintained with like-for-like growth of 22.2% and its branch rollout programme continues “at pace” in the UK, where it added 54 new branches between June and December, and also in Europe (17 new branches in 2020).
‘Digital enablement’ continues to be a key part of the Group’s strategic agenda. The Travis Perkins business, for example, is continuing its “progress towards a modern merchant” with an enhanced website that offers trade account management capability, Click & Collect enablement and also a Mobile App now available to trade customers.
In its P&H division, online sales increased 18% to £57m whilst for Toolstation, over 70% of customer journeys were digitally led — driven by click and collect which showed a 600% year-on-year increase fuelled additionally by improvements in web conversion.
Further developments were also seen in its branch network rationalisation programme which is seeing the closure of approximately 190 Merchanting and P&H branches, focusing on the Group’s smaller sites. This will see a headcount reduction of approximately 2,500, including branch staff and support functions across all businesses and head office.
Total revenue from continuing businesses returned to growth in H2 at 1.4% (excluding Tile Giant and Primaflow F&P, which were disposed during 2020) demonstrating the “resilience of the Group’s business models”. Adjusted operating profit of £227m was reported, reflecting the lower volumes but “partially offset by actions to reduce operating costs, including both short term controls and acceleration of longer term plans, coupled with appropriate government support in the merchant businesses”.
Nick Roberts, Chief Executive Officer, said: “2020 was a year of unprecedented challenges and I am full of admiration for the energy and determination of our colleagues to ensure the safety of our customers, suppliers and each other. Despite these challenges, we have shown great agility and versatility in adapting our working practices, further digitalising our engagement with customers and reshaping our business to suit the changing demands of our markets.
“Our teams have also been able to make excellent progress on a number of key initiatives supporting our strategic objectives, particularly around simplifying commercial deals and refining our pricing architecture, which will drive future benefits.
“In addition, I am pleased to be able to confirm that the process to demerge Wickes has recommenced. The Wickes digitally-led model has proved highly effective during the pandemic and the business is in great shape to embark on its journey as a standalone entity.
“Whilst uncertainty remains, we have seen a good recovery through the second half which gives us confidence that the fundamental drivers in our markets are robust. The continuing progress against our strategic plans leaves the Group well placed to outperform in those markets.”
Financial highlights from the 2020 Results Presentation are detailed below for the Travis Perkins plc Group and its key segments (Merchanting, P&H, Toolstation, Wickes), whilst the full Year End report can be viewed by clicking the link.