Builders and plumbers merchant group Travis Perkins Plc has posted slower sales growth in its third quarter, thanks to its plumbing and heating division.
Sales grew in other divisions – general merchandise, consumer and contracts business – grew, however, sales in plumbing and heating were 5.1% down. The unusually mild autumn is partly to blame, as is the Government’s incentive schemes which brought forward boiler sales.
Like-for-like sales for the group as a whole rose 5.7% in the three months to Sept. 30, compared with 10.2% in the first half. Total third-quarter sales increased 11.9%. Shares in the company which trades from 16 other brands including Wickes, City Plumbing, Keyline, Tile Giant and BSS, fell up to 4 percent in early trading.
That fall reflected a later start to the plumbing and heating season due to the unusually mild autumn, as well as government-led incentive schemes pulling forward boiler installations into the previous financial year and disruption caused by store conversions. The group expects these market conditions to remain challenging for the next six to nine months before improving.
Chief executive John Carter said that trading has remained strong for most of the TP businesses. “We have outperformed our markets whilst making strategic investments that we are confident will support continued market share gains.”
Third-quarter like-for-like sales in the general merchanting division rose 10.9% and were up 6.4% in the consumer division, which includes Wickes, and up 9.6% in the contracts business.
Carter continued: “General Merchanting performed well with work to modernise the business progressing. The strengthened management team at Wickes has continued to build on the early progress seen in the second quarter. The Plumbing & Heating team are working hard on reconfiguring our branch network, but against the backdrop of a very challenging market. The Contracts business continues to grow and is focused on improving its customer proposition.
“I am confident that our plans to improve each of our businesses, resulting in profitable organic growth, combined with our strong focus on returns, will create substantial further shareholder value.”
So far this year the Group has opened 75 new stores and branches, including 45 implants where Benchmarx and Toolstation businesses were opened inside existing Travis Perkins branches and Wickes stores. In addition 20 Toolhire operations were opened inside existing Travis Perkins, BSS and Keyline branches.
In the Plumbing & Heating business 21 PTS branches have been successfully converted to City Plumbing branches. Around 50 branches will have been converted by the end of the year, at which point a further 50 branches will be undergoing conversion. As part of the programme more than 20 branches have been closed.
The Warrington heavyside range centre, which was relocated at the start of the year, has continued to perform well. Sales growth at the branches supported by Warrington has further accelerated. The second heavyside range centre in Cardiff is on track to be completed before the end of the year and will serve around 130 branches. A third range centre will be developed in Tilbury to serve London and a fourth site has now been secured in Coventry.