Travis Perkins 'Positive Performance in a Challenging Market'

Earlier today, Travis Perkins PLC, announced their full year results for the twelve months ended 31 December 2019, summarised as 'Positive trading performance against a challenging market backdrop'.

Download the FY 2019 Results Presentation here.

Group Financial highlights:-

• Like-for-like revenue growth of 3.8% with total revenue growth of 3.2%
• Good growth in the Merchant businesses despite challenging market conditions, continued excellent growth in Toolstation and a strong recovery in Wickes.
• Adjusted operating profit growth of 7.8% driven by Wickes recovery, the transformation programme in P&H and the positive impact of cost reduction activities
• Net adjusting items of £187m including a £108m impairment relating to halting of the ERP replacement programme.
• Return on Capital Employed increased by 50bps to 10.1% against a 2018 IFRS 16 comparative figure.
• Continued strong free cash flow generation of £195m.

Strategic Process

• Merchant businesses outperformed challenging end-markets, benefitting from business simplification and greater local empowerment.
• Acceleration of Toolstation UK expansion continued with 65 new branches opened and the acquisition of a controlling share of Toolstation Europe.
• Process to demerge Wickes well progressed, due for completion in Q2 2020.
• Process to divest the P&H business paused during period of significant uncertainty, sale of the PF&P wholesale business completed in January 2020.
• Cost reduction actions on track; streamlining above-branch operations and increasing the agility of the Group

Nick Roberts, Chief Executive Officer, commented:

“Against a challenging market backdrop we have delivered a strong operational and financial performance across the Group. Our merchanting businesses gained market share as a result of a range of initiatives to improve our customer proposition, including increased local empowerment for our branch managers, while the pace of the Toolstation expansion accelerated. The actions put in place to improve our Wickes and Plumbing & Heating businesses meant that both recovered well during the year and made positive contributions towards the Group’s overall performance.

“Our strategic progress in 2019 has been significant, but there remains much work to do in order to build stronger foundations for the Group to deliver enhanced returns and long-term growth. Our immediate priorities are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further simplification of our business and successful delivery of the demerger of Wickes.

“The long-term fundamental drivers of the Group’s end-markets remain strong, and our businesses enjoy leading positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen some green shoots of recovery in our lead indicators, although it remains too early to point towards any tangible improvement in RMI. The Group remains focused on delivering against our key priorities, and we are optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and deliver improved returns for our shareholders.”

Source: Insight DIY & Travis Perkins PLC

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