Builders and plumbers merchant group Travis Perkins has announced a transformation plan for its plumbing and heating business designed to stabilise performance and to create more options to maximise shareholder value.
The plan will see an integrated City Plumbing and PTS branch network to be run under a single management team. The offer will include online brands, which will be used as range extensions, supported by the branch network. The business operating model will be simplified with the integrated branch network and online channels forming the core of the business with a number of the smaller businesses integrated. The F & P wholesale business will increasingly operate on a standalone basis.
Alongside these changes there will be broader ranges, better availability, more consistent pricing and online development, alongside improvements to specialist categories and selective category extension. Supporting this will be a dedicated supply chain for the plumbing & heating business, separated from the group infrastructure, and making better use of the primary distribution centre in Warrington.
The plumbing and heating division plan was revealed as part of the Group’s interim results announcement this morning (August 2). Travis Perkins’ Plumbing & Heating revenue reduced by 1.5% from £679m in 2016 to £669m and by 1.2% on a like-for-like basis. The branch network was reduced by 11% to 428. Growth in the first quarter was stronger than the second quarter, as expected, owing to trade customers buying in advance of manufacturer led cost price increases. Performance reflected the continued difficult market conditions in the large contract installer market, impacting PTS, where growth in the new build market was not enough to offset continued declines in social housing and reduced trade with one of our largest customers.
City Plumbing showed solid growth in the half, with improving like-for-like sales. The wholesale business also delivered positive sales growth with an improving trend through the second quarter.
Operating profit declined in the first half as a result of lower operating leverage resulting from the decrease in volume in addition to the very competitive market.