In its first quarter trading update for the three months to 31 March 2023, Travis Perkins plc states it has delivered a “resilient Q1 trading performance… amid challenging market conditions,” with total trading day adjusted sales down by (2.8)%.
The report notes that, “as expected”, trading volumes in the Merchanting business were “impacted by weakness in the new build housing and domestic repair, maintenance and improvement (RMI) markets.” The commercial, industrial and public sector markets, which represent just under half of the Group’s end market exposure, were shown to have seen more resilient demand.
Merchanting sales price inflation “moderated from the second half of 2022 but remained elevated at 9.0%.” The update said this was “predominantly driven by the rollover of price increases from prior year but also reflective of pass-through of further manufacturer increases on some key product lines in 2023.” Overall, Merchanting total sales were down by (4.7)% in the quarter.
According to the report, “longer term social and economic infrastructure projects continue as planned across areas such as social housing, road, rail, schools and hospitals with investment in these strategically important markets largely underpinned by legislation and regulation, which continue to evolve at pace.” As an example, it cited the recent announcement of nearly £2 billion in funding for The Social Housing Decarbonisation Fund which is said to “present an excellent opportunity” for the Group’s Managed Services business.
The Group says it continues to make “good strategic progress with the development of value-added services as customers increasingly look for support to navigate a more complex operational and regulatory environment.” In March, the business launched its WholeHouse initiative, billed as an innovative approach which offers a turn-key solution to SME and regional housebuilders to plan and design bespoke digital models of individual housing units with the Group supplying all materials required for the build.
Whilst this remains early-stage, the business says there has been a positive response from customers, and is an “example of how Travis Perkins Group can leverage its scale, deep understanding of the market and best-in-class sustainability insights to deliver benefits for customers.”
Toolstation, meanwhile, was shown to have delivered a good performance in the first quarter with total sales growth of 8.6% and like-for-like sales growth of 4.6%. The report noted: “In the UK, the appeal of the omni-channel model to customers continues to drive digital adoption with App downloads now passing one million and almost a third of customers now preferring to use the App to purchase from Toolstation.”
The business has commenced commissioning of the new partly-automated UK distribution centre in Pineham, Northamptonshire which remains on track to be fully operational by the third quarter of the year. In Europe, Toolstation total sales were up 14% (on a constant currency basis) during the period with equally good adoption of the App, notably amongst the trade customer base.
Nick Roberts, Chief Executive, commented: “As we had anticipated, trading conditions were challenging in the first quarter but our diverse exposure across the construction sector has enabled us to deliver a resilient performance. The timely actions taken to prepare our businesses for a lower demand environment mean that we continue to expect to deliver a full year performance in line with market expectations.
“We are focused on ensuring the right balance between cost and capital discipline and investing to deliver against our strategic priorities. The growth opportunities provided by the need to decarbonise the UK’s built environment, improve the energy efficiency of public and private buildings and increase the UK’s housing stock remain significant. Allied to our strategy of expanding value-added services in the Merchant businesses and maximising the growth potential of Toolstation, these structural drivers leave the Group well placed for future outperformance.”
| Q1 2023 | Merchanting | Toolstation | Group |
| Volume | (12.2)% | 1.0% | (10.2)% |
| Price and mix | 9.0% | 7.6% | 8.7% |
| Total revenue growth | (3.2)% | 8.6% | (1.5)% |
| Network changes | 0.5% | (4.0)% | (0.1)% |
| Trading days | (1.5)% | 0.0% | (1.3)% |
| Like-for-like revenue growth | (4.2)% | 4.6% | (2.9)% |
Travis Perkins Group has also recently announced the appointment of Dave Castle as the new Managing Director of its specialist pipeline and heating solutions business, BSS, and as a member of the Group Leadership team. The appointment is effective from May 1st 2023.
Dave is currently Regional Managing Director for South West and Wales in the Travis Perkins General Merchant (TP) business. He first joined the Group in 2001 as a management apprentice before becoming a branch manager for TP, then for CCF. He returned to the TP business in 2013 as Regional Director for the Devon, Somerset, Wiltshire and Dorset regions and assumed his current role in 2021. He has also recently led the TP Digital and Marketing teams.
In his new role, he will lead the BSS Team in developing their strategic opportunities for bigger and better conversations with customers and continuing to build a culture of belonging for our colleagues.
He takes over from Angela Rushforth, who took over as Managing Director of Toolstation in March 2023.
Nick Roberts, CEO of Travis Perkins plc said: “Dave is people focused and passionate about modernising and developing our business to meet the changing needs of our customers. I am really proud that we have been able to strengthen the GLT with Dave’s broad experience of our Group and the trade. Dave’s career to date also demonstrates where an apprenticeship can lead to.”
Richard Perkins will assume Dave’s prior role as Regional Director for an expanded South England and Wales in the TP Business.
