Travis Perkins plc Q3 2019 trading update: Resilient trading and continued progress in uncertain market conditions (893631)

 
 Travis Perkins (TPK) 
Travis Perkins plc Q3 2019 trading update: Resilient trading and continued 
progress in uncertain market conditions 
 
22-Oct-2019 / 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 2019 
 
 Travis Perkins plc Q3 2019 trading update 
 
 Resilient trading and continued progress in uncertain market conditions 
 
Highlights 
 
  · Merchanting businesses continued to outperform in challenging market 
  conditions 
 
  · Excellent growth in Toolstation UK; acquisition of controlling share of 
  Toolstation Europe 
 
  · Strong Wickes performance across both core DIY and K&B; demerger on 
  track for Q2 2020 
 
  · P&H divestment paused primarily due to market uncertainty 
 
Q3 2019 sales Merchanting(1) Toolstation(1) Retail(2)  Group P&H(1)  Group 
growth 
 
                                                       (exc. 
                                                        P&H) 
Like-for-like           1.6%          15.4%      9.7%   4.3%      -   3.4% 
sales growth 
Net change in         (0.6)%           5.9%    (1.4)% (0.2)% (2.6)% (0.8)% 
space 
Trading days            1.6%              -         -   1.1%   1.6%   1.2% 
Total sales             2.6%          21.3%      8.3%   5.2% (1.0)%   3.8% 
growth 
Two-year LFL            5.9%          25.1%      1.8%   6.0%  14.8%   7.7% 
growth 
 
YTD 2019      Merchanting(1) Toolstation(1) Retail(2)  Group P&H(1)  Group 
sales growth 
 
                                                       (exc. 
                                                        P&H) 
Like-for-like           4.7%          16.6%      9.7%   6.7% (2.7)%   4.7% 
sales growth 
Net change in         (0.7)%           5.7%    (1.1)% (0.3)% (3.1)% (1.1)% 
space 
Trading days               -              -         -      -      -      - 
Total sales             4.0%          22.3%      8.6%   6.4% (5.8)%   3.6% 
growth 
 
Nick Roberts, Chief Executive, commented: 
 
"Now in my third month since taking over as CEO of the Group, I have spent a 
  considerable amount of time in our branches, learning about our businesses 
and our markets from colleagues, customers and suppliers. This has confirmed 
  my initial impressions that our businesses are well positioned to compete 
  strongly and win greater share in their markets in the future. I am 
  particularly impressed by the quality of our teams and their commitment to 
  excellent customer service. The plan to simplify the Group's portfolio of 
  businesses remains the right one, with good progress made through the 
 quarter towards reducing cost and complexity and enabling greater focus and 
  more disciplined capital allocation to our advantaged trade-focused 
  businesses. 
 
  The Group delivered a solid performance in Q3, despite trading conditions 
 becoming incrementally more challenging through the course of the summer as 
  a result of the on-going market uncertainty. Though the Group maintains a 
  cautious outlook for the near-term, full year performance remains in line 
  with our expectations." 
 
  Business performance 
 
 Total Group sales grew by 3.8% in Q3, and by 3.4% on a like-for-like basis. 
 There was one additional trading day in the quarter, bringing the number of 
 trading days year-to-date in line with 2018. Across the Group, year-to-date 
sales price inflation has been lower than in previous years, at around 1.5%, 
  primarily concentrated in the merchanting businesses. 
 
  Despite the wider building materials distribution market softening since 
 mid-year, the Group's Merchanting businesses delivered like-for-like growth 
  of 1.6%. Travis Perkins, the general mixed merchant, showed encouraging 
  like-for-like growth of 2% demonstrating continued market share gains, 
  particularly in heavyside categories. The larger commercial construction 
  market has been more challenging in the quarter, with the specialist 
  merchants delivering modest growth, primarily driven by price inflation. 
  Pressure on sales volume has been exacerbated by the continued supply 
  restrictions on plasterboard materials in CCF, although the situation is 
  steadily improving. The P&H business continues to perform well, with good 
  like-for-like growth in higher-margin branch network sales offset by lower 
  revenues in the wholesale business. 
 
  Toolstation continued its impressive like-for-like and total sales growth, 
 underpinned by the continued expansion of the UK branch network to over 370 
  branches, and a successful further extension of trade-focused ranges which 
  are helping to increase sales density. Further enhancements in customer 
  proposition, such as a 5-minute click & collect service, are improving 
  convenience for customers. 
 
  The Retail segment achieved like-for-like sales growth of 9.7%, with total 
sales growth of 8.3%. The strong performance of Wickes continued in Q3, with 
  further market share gains in the Home Improvement market through core DIY 
  categories and in the Kitchen & Bathroom showroom (K&B). Core DIY sales 
  continue to benefit from a strong trading plan with targeted promotional 
  activity, the success of the "online-in-store" ordering service, which is 
  improving customer access to an extended range of products, and the 
  continued attraction of the TradePro scheme to small trade customers. K&B 
  sales remain robust, with increasing lead generation through digital 
  channels, good sales conversion and increasing proportion of installation 
  services. 
 
  Strategic progress 
 
  The process to demerge Wickes from the Travis Perkins Group is on track, 
  both in terms of the separation of the business from the Group to increase 
  its autonomy and the regulatory process required. The Group aims for the 
  demerger to be completed in Q2 2020. Given the current unprecedented level 
 of uncertainty, we have decided to pause the sale process of the Plumbing & 
  Heating business for the time being. In the quarter, the Group acquired a 
  controlling share of the Toolstation Europe business which will enable the 
 Group to accelerate investments to expand the Toolstation network in Europe 
  in the coming years. 
 
 The Group remains on target to achieve its planned cost reductions in 2019, 
    with actions identified or already underway to achieve GBP20m to GBP30m of 
  annualised savings by mid-2020 which will reduce complexity, lower the 
  above-branch cost base and speed up decision making, and improve service 
  levels for customers. 
 
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Footnotes 
 
(1) Like-for-like and total sales growth for the three month period ended 30 
September 2019 compared to the three month period ended 30 September 2018. 
 
(2) Wickes like-for-like and total sales growth for the 13 week period ended 
  28 September 2019 compared to the 13 week period ended 29 September 
  2018.Tile Giant like-for-like and total sales growth for the three month 
  period ended 30 September 2019 compared to the three month period ended 30 
  September 2018. 
 
ISIN:           GB0007739609 
Category Code:  QRT 
TIDM:           TPK 
LEI Code:       2138001I27OUBAF22K83 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   24125 
EQS News ID:    893631 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

October 22, 2019 02:00 ET (06:00 GMT)