Travis Perkins: Q3 2020 trading update - continued recovery (1142325)

 
 Travis Perkins (TPK) 
Travis Perkins: Q3 2020 trading update - continued recovery 
 
22-Oct-2020 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
22 October 2020 
 
Travis Perkins plc - Q3 2020 trading update - continued recovery 
 
Highlights 
 
  · Group like-for-like revenue growth of 3.9% in Q3 
 
  · Strong demand through domestic RMI sales continued, driving the strong 
  performance in Wickes, Toolstation and local trade market 
 
  · Lag in recovery of larger customer activity, including new housebuilding 
  and larger construction projects 
 
  · Group liquidity remains strong, GBP980m of liquidity headroom at 30 
  September 2020 
 
Q3 2020 sales   Merchanting1 Toolstation1 Retail2    P&H1  Group 
growth 
Like-for-like         (3.1)%        25.5%   18.3%   0.40%   3.9% 
sales growth 
Net space             (7.4)%         8.9%  (1.0)%  (4.2)% (4.9)% 
change 
Acquisitions /             -        15.5%       - (16.6)% (2.4)% 
disposals 
Trading days               -            -       -       -      - 
Total sales          (10.5)%        49.9%   17.3% (20.4)% (3.4)% 
growth 
Two-year              (1.5)%        44.8%   29.8%    0.4%   7.4% 
like-for-like 
 
YTD 2020 sales Merchanting1 Toolstation1 Retail2    P&H1   Group 
growth 
Like-for-like       (18.4)%        17.3%    0.2% (15.6)% (11.8)% 
sales growth 
Net network          (2.6)%         8.8%  (0.8)%  (1.0)%  (1.4)% 
changes 
Acquisitions /            -        15.1%       - (12.8)%  (1.8)% 
disposals 
Trading days           0.4%         0.4%       -    0.4%    0.4% 
Total sales         (20.6)%        41.6%  (0.6)% (29.0)% (14.6)% 
growth 
 
Nick Roberts, Chief Executive, commented: 
 
 "We have reported a positive overall like-for-like sales performance in the 
quarter as our markets have continued to recover following the impact of the 
  national lockdown earlier this year. This has been driven by a strong 
  recovery in demand across domestic RMI markets, benefitting the Travis 
  Perkins, City Plumbing, Wickes and Toolstation businesses who serve these 
  markets. Currently this domestic RMI trend remains strong. 
 
  Whilst local trade activity has recovered well, our trade businesses 
  continue to experience a lag in recovery from larger housebuilding and 
  construction projects. However, there are signs of increasing workflow 
  across these sectors as underlying demand strengthens as businesses have 
 adapted to new and safe ways of working that enable them to keep sites open 
  during periods of local lockdown. 
 
 During the quarter, we have made further progress in strengthening the core 
  of our trade businesses, in addition to completing the disposal of Tile 
  Giant. 
 
  Our excellent cash generation this year has built a strong liquidity 
  position, and combined with the decisive actions taken in June to realign 
  our cost base to the new trading environment we are confident in both the 
  Group's ability to navigate the near-term uncertainty, as well as our 
 position for the long term as we build towards becoming the leading partner 
  for the construction industry." 
 
  Business performance 
 
 Like-for-like sales grew by 3.9% in Q3, although total Group sales declined 
  by 3.4%, reflecting branch closures since June. There was no net impact of 
  trading days in the quarter, compared with the same period in 2019. Across 
  the Group there was no appreciable impact from price inflation, with the 
  change in sales driven by volume. 
 
  There have been significant differences in performance across the Group's 
end markets, with particular strength in domestic RMI, manifesting as strong 
  sales in DIY categories in Wickes and Toolstation, and good trading levels 
  with local trade customers in Toolstation, Travis Perkins and P&H. By 
  contrast, the larger end of customer activity has been slower to return to 
  normal, and at the end of September both new housebuilding and commercial 
  construction continue to run at levels some way below 2019, specifically 
  impacting the specialist merchants and elements of the P&H business. 
 
 The progression of sales recovery has continued throughout Q3, particularly 
 in the trade focused businesses. During July, volumes picked up strongly as 
  markets exited the lockdown period. Trading in August was modestly softer, 
  impacted by a protracted holiday season, before then picking up again in 
September in line with schools reopening and many trades returning to a more 
  normal work schedule. 
 
 Continued buoyancy in the DIY markets and a more encouraging trend in trade 
  focused markets in September has driven like-for-like growth of 8% for the 
  month, with total sales growth, adjusted for trading days, of around 0.3%. 
  The difference between LFL sales and total sales performance was primarily 
  due to the impact of the merchanting branch closures in June and the 
  disposal of PF&P, partially reduced by the acquisition of Toolstation 
  Europe. 
 
  Across the Merchant and P&H segments, whilst the branch closures announced 
  in mid-June were significant drivers of the reduction in total sales, 
  businesses have successfully migrated a significant proportion of sales to 
  nearby branches, in line with management expectations. This has been 
  particularly true for larger customers who already trade with multiple 
branches and customers of the specialist merchants where a higher proportion 
  of sales are delivered. At a Group level, this retention of sales added 
  around 3% to like-for-like performance. 
 
  Liquidity position 
 
  The Group continues to maintain a strong liquidity position, with GBP580m of 
cash on deposit at 30 September combined with the undrawn RCF giving overall 
   headroom of GBP980m. 
 
  Portfolio development 
 
  The Group completed the sale of the Tile Giant business on 30 September. 
  This demonstrates a further step towards the simplification of the Group, 
  and to focus on our advantaged trade businesses. 
 
  Outlook 
 
  During Q3 the Group's end markets have shown an encouraging recovery from 
  the lockdown period, however significant uncertainty remains from both the 
  pandemic and the ongoing Brexit negotiations, making it hard to forecast 
  performance in the near-term. Based on the assumption that current volume 
  trends continue, including the ongoing strength in DIY sales, and that any 
further lockdown measures introduced do not have a significant impact on the 
 Group's end markets, the Group expects its EBITA performance for 2020 to be 
  in the upper half of the current range of analysts' expectations3. 
 
  Enquiries: 
 
Travis Perkins                         Powerscourt 
Graeme Barnes                          Justin Griffiths / James White 
[phone]                    [phone] 
[e-mail]      [e-mail] 
 
Heinrich Richter 
[phone] 
[e-mail] 
 
Footnotes 
 
1) Like-for-like sales growth for the three month period ended 30 
September 2020 compared to the three month period ended 30 September 2019. 
Total sales growth for the three month period ended 30 September 2020 
compared to the three month period ended 30 September 2019. 
 
2) Wickes like-for-like and total sales growth for the 13 week period 
ended 26 September 2020 compared to the 13 week period ended 28 September 
2019. 
 
3) Company compiled market consensus for FY 2020 Group EBITA as at 15 
October 2020, calculated from 14 analysts, of GBP239m (range of GBP222m to 
GBP261m). 
 
ISIN:          GB0007739609 
Category Code: TST 
TIDM:          TPK 
LEI Code:      2138001I27OUBAF22K83 
Sequence No.:  86339 
EQS News ID:   1142325 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

October 22, 2020 02:00 ET (06:00 GMT)