Home / News / TP revenues creep ahead

TP revenues creep ahead

 

Builders and plumbers merchant group Travis Perkins increased revenue by 4.6% to £6.22bn in the 12 months to December 31 2016, the group’s year-end results have revealed.

Exceptional charges relating to goodwill and intangible and tangible assets, principally in the plumbing & heating and tile businesses and the previously announced closure of underperforming branches, supply chain rationalisation and central restructuring reduced the pre-tax profit by 67%, however, to £73m.

John Carter, Travis Perkins Chief Executive Officer said: “2016 was another solid year for the Group, with continued strong performances from the Consumer, Contracts and General Merchanting divisions, which together contributed 90% of Group adjusted operating profit. These businesses continued to benefit from the investments made in the branch network and customer propositions over the last three years, which provides a strong base for future growth.

“It was a much more difficult year for the Plumbing & Heating division driven by structural challenges for traditional merchant businesses in this segment. Whilst the network restructuring work carried out in 2014 and 2015 created a more focused branch network, further work is required and over the next six months we will be exploring all routes to enhance returns. There are improvements we can make to the ranges we offer to our customers, our availability, our online presence and our service proposition.

“The macro-economic outlook of the UK is mixed. The sharp decline in the value of Sterling since June 2016 has created cost pressures on imported goods and materials, and the expectations for secondary housing market transactions and growth in the RMI market have weakened. We have a proven track record of managing our cost base and took decisive action in October 2016, announcing a restructuring programme to close underperforming branches and improve supply chain efficiency. We enter 2017 with a strong balance sheet and will continue to invest selectively in our leading businesses to further strengthen our competitive advantages which will enable us to continue to outperform and drive shareholder value over the medium term.”

In the General Merchanting division, total revenue of £2.07bn was 5.1% ahead of the same period 12 months previously, with like-for-like growth 1.7%. The branch  network increased by 20 to 883.

The group stated that the ongoing programme to modernise Travis Perkins branch formats saw 52 branches now operating with the new shop and yard layouts and that the initial returns from these investments are encouraging. During the year, the division also trialled a new branch concept at Staples Corner in London with a new counter format, significantly extended lightside ranges, a new pricing structure, a new layout and extended seven-day opening hours. The heavyside product range available to customers on a next-day basis via the heavyside rage centres was increased by over 15% to 3,500 products, with a further 3,000 products available within 48 hours.

The Benchmarx business further refined the range of kitchens leading to robust like-for-like revenue growth and market share gains in the trade kitchen market. Further progress was made on improving the multi-channel proposition for Travis Perkins, with a transactional website now offering a two-hour click-and-collect service launched nationwide on 19,000 locally stocked SKUs.

In 2016, thirteen former Keyline branches were rebranded as Travis Perkins. Travis Perkins opened six new branches, relocated seven to more suitable sites and closed 14 underperforming branches and the Group’s timber supply centre at Ferndown. 18 new Benchmarx branches were opened in 2016, including five as implants in existing Travis Perkins sites or located as part of a Travis Perkins trade park.

Plumbing and heating revenue of £1,359m was 0.9% down on the previous year, thanks mainly to the social housing boiler and heating replacement market remaining difficult with traditional merchants competing aggressively on price for business impacting PTS. The growth in sales at CPS Plumbing was also less than had been expected.

The Contracts division’s revenue of £1,267m was 4.4% ahead of the previous year. Keyline achieved strong like-for-like sales growth in 2016, especially in the second half of the year. Overall sales were modestly reduced following 13 branches transferring to Travis Perkins, reducing the remaining branch network to 64.

BSS sales grew modestly in a difficult market with continued reduced government spending on infrastructure projects. CCF delivered a strong revenue performance in the year, although like-for-like sales growth was diluted by the opening of eight new branches in 2015. Customer fulfilment was transferred to the new branches to free up capacity in the existing network which has subsequently enabled these branches to win new business.

The Consumer division delivered strong revenue growth of 9.5%, up 6.4% on a like-for-like basis, resulting in continued strong market share gains for both Wickes and Toolstation. A further 46 new Wickes store formats were opened in 2016, bringing the total number of new format stores to 62. The new formats provide more inspiration for DIY customers through much improved kitchen and bathroom displays and design centres. The programme to roll out further new formats will continue in 2017.

The Wickes distribution centre network was rationalised, reducing to a single centre in Northampton which now serves all store and direct to customer deliveries.

About Fiona Russell-Horne

Fiona Russell-Horne
Editor-in-Chief across the BMJ portfolio.

Check Also

Russell Roof Tiles takes on Brewers’ sponsorship

 Burton-based, Russell Roof Tiles is to become League One Burton Albion Football Club’s shirt sponsors. …