In advance of the announcement of its interim results on 8 September, Travis Perkins has set out a trading update covering sales figures by quarter for the first half of 2020.
Nick Roberts, CEO, said: “Since the trading update on 15 June, the business has continued to recover well with good demand from RMI and infrastructure markets offsetting ongoing challenges in the new build and commercial construction sectors.
“We remain cautious as to the near-term headwinds facing our business and the wider economy, nevertheless the decisive actions we have taken to manage our cost base mean that we are well placed to continue to service our customers, support our colleagues and generate value for our shareholders.”
Trading performance
Overall, Group revenue for the first six months of 2020 was £2,780m, down 20% on the same period in 2019 (£3,484m) due to the significant impact of the COVID-19 pandemic and resulting lockdown.
Quarterly sales by segment
|
H1 2020 |
Merchanting | Toolstation | Retail | P&H | Group |
| Like-for-like sales | (25.8)% | 12.9% | (8.2)% | (22.8)% | (19.3)% |
| Net new space and acquisitions | (0.7)% | 23.6% | (0.8)% | (11.1)% | (1.5)% |
| Trading days | 0.6% | 0.6% | 0.5% | 0.6% | 0.6% |
| Total sales growth | (25.9)% | 37.1% | (8.5)% | (33.3)% | (20.2)% |
| Q2 2020 | Merchanting | Toolstation | Retail | P&H | Group |
| Like-for-like sales | (42.8)% | 16.5% | (19.8)% | (48.4)% | (34.8)% |
| Net new space and acquisitions | (0.5)% | 26.0% | (0.5)% | (8.4)% | (0.9)% |
| Trading days | – | – | – | – | – |
| Total sales growth | (43.3)% | 42.5% | (20.3)% | (56.8)% | (35.7)% |
| Merchanting | Toolstation | Retail | P&H | Group | |
| Q1 LFL Sales Growth | (8.7)% | 9.1% | 4.5% | (1.9)% | (3.8)% |
| Q2 LFL Sales Growth | (42.8)% | 16.5% | (19.8)% | (48.4)% | (34.8)% |
Q2 like-for-like sales progression by month
| Merchanting | Toolstation | Retail | P&H | Group | |
| April | (73.1%) | (1.9%) | (53.1%) | (69.1%) | (63.6%) |
| May | (37.4%) | 23.8% | (32.1%) | (53.0%) | (34.6%) |
| June | (17.6%) | 27.6% | 21.7% | (23.4%) | (6.7%) |
| Q2 | (42.8%) | 16.5% | (19.8%) | (48.4%) | (34.8%) |
Since the most recent update in mid-June, TP reports that its Merchanting businesses have continued to recover well with the improvement in RMI markets and infrastructure spending “proving to be more robust than the new housebuilding and commercial construction markets”. Plumbing & Heating markets are also “recovering more gradually” as projects are predominantly carried out indoors.
Toolstation and Wickes continue to benefit from “strong DIY sales delivered through market-leading multi channel capability”. Overall, Wickes achieved strong sales growth in June following the re-opening of its stores to customers in late May, with significant growth in core DIY categories “more than offsetting the slower recovery in Kitchen & Bathroom installations”.
Despite the closure of 165 branches in June, representing around 8% of its overall estate, the Group says it has continued to experience an “improving trend on total sales volumes so far in July, with the Group’s total sales run rate now close to prior year”.
At 30 June 2020, the Group had £455m of cash on deposit giving a strong overall liquidity headroom position of £855m.
David O’Brien, equity analyst at Goodbody, commented: “Travis Perkins has issued a solid update with the key takeaway being volumes are back to prior year levels in July, which is despite the already announced closure of 8% of its estate (165 branches) in June.
“In addition, cashflow generation remains to the fore with total liquidity at the end of the period of £855m, up from £763m on June 15th. This will have been aided by the negative working capital dynamics of the fast-growing businesses of Toolstation and Retail.”
