Toolstation 2020 Performance 'Exceptional'

Travis Perkins has reported on trading for the year ended December 31st, 2020.

Learn more about the Group's performance here. 

Review Wickes' 2020 performance here. 

Toolstation

Toolstation revenues increased by £188m in the year, up 42.1%, with the consolidation of Toolstation Europe (following the acquisition in Q4 2019) accounting for £48m of the increase.

Like-for-like growth in Toolstation UK of 20.9% represented an exceptional performance, especially when considering the level of disruption from the lockdown in late March and April.

Alongside the ongoing work to continue to ensure a truly compelling customer proposition, the Toolstation UK business also made significant progress in developing the infrastructure of the business. With branches unable to serve customers directly during the initial lockdown, the branches operated as click & collect fulfilment centres. To support this the Toolstation website was rebuilt in a matter of days, before the wider IT infrastructure of the business was then replatformed over the following weeks in order to be scalable and more resilient as the business grows.

The pivot to digital trading required a significant increase in direct-to-customer deliveries, and to satisfy this demand the Redditch distribution centre was successfully expanded and repurposed from store replenishment to customer fulfilment.

Despite a pause in the network expansion programme between March and June as fitters could not access sites, 60 new branches were opened in the UK during the year as planned. New formats continue to be trialled, including smaller footprint branches and variations on the click & collect model to improve both the customer experience and operational efficiency. The number of new stores for 2021 is expected to be broadly similar to 2020.

The costs involved in adapting and running the distribution network on a socially distanced basis, as well as the higher proportion of delivered sales and the costs to make the necessary improvements to the business’ digital capabilities, increased the operating costs of the business during the year, more than offsetting the growth in gross profit generation in the UK.

For Toolstation Europe, the response to Covid-19 has differed across the countries in which the business operates but, in all cases, the strength of the customer proposition has driven further market share gains. The combination of the multichannel offering and consistent availability of stock has been extremely well received by tradespeople across the Netherlands, Belgium and France and has allowed branches to trade effectively throughout the pandemic when competitors have been forced to close.

These competitive advantages have seen underlying revenue* increase by 79% in the Netherlands and Belgium (60% on a like for like basis) where 9 new branches were opened, taking the total to 64. In France underlying revenue* grew by 92% with like-for-like sales up 75%. 8 new branches were added, taking the total to 19, and a new distribution centre in Lyon is now operational, laying the foundations for future expansion.

With the European business very much at the initial rollout stage, and with the disruption of the pandemic, a loss of £(16)m was recorded for 2020. Losses in 2021 are expected to be at a similar level as the rollout of new branches continues at pace.

*A controlling interest was acquired in Toolstation Europe on 30 September 2019. Underlying revenues reflect the performance of the business for the whole of the financial year including the period January to September 2019.

View the full Travis Perkins PLC 2020 results report here.

Source : Travis Perkins PLC

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