Revenue at builders merchant group Travis Perkins fell 11.5% in 2020, thanks to the lockdowns caused by the Covid-19 pandemic, the group’s year end results revealed this morning (March 2).
Total group revenue for the year ending December 31 2020 were £6,158m, down from £6,956m at the same point a year earlier. Adjusted operating profit fell to £227m from £442m in 2019 and adjusted earnings per share fell to 42.4p per share (2019: 112.7p per share). Basic EPS reduced to a loss of 8.8p per share. The group posted a £7.7m pre-tax loss for the year, compared with a £181m pre-tax profit for the previous year. However, this shows how far trading and profit bounced back in the second half; the firm posted a £127m pre-tax loss in the first half.
Total revenue in the Merchanting segment fell 17.2% to £3,065m from £3,703m , while operating profit was down by 46.5% at £152m (2019: £284m). That said, there was an encouraging recovery in the second half, particularly in the Travis Perkins General Merchant, led by domestic RMI demand where volumes were approaching 2019 levels by the end of the year. Housebuilding and commercial construction, to which the specialist merchants are primarily exposed, however, were slower to recover with volumes still down by between 10% and 15% during the fourth quarter.
In June 2020, the group announced a restructuring that would reduce branch numbers across the plumbing and heating and merchanting businesses by around 190 and headcount across the group by approximately 2,500.
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% was described as an “exceptional performance”, especially when considering the level of disruption from the lockdown in late March and April. The business also managed to add 60 branches to its total.
Wickes also managed to increase sales, by 3.6% from £1,342m in 2019 to £1,391m at the end of 2020.
The Plumbing & Heating division saw total revenue fall to £1,069m from £1,465m (-27.0)%. The group reports that this division was the most significantly impacted of the Group’s businesses with branches initially being forced to close, customers restricted to essential maintenance work and the subsequent challenges faced by installers who had to adopt a very careful approach to working in domestic properties. There was a robust recovery, however, in the second half, with like-for-like sales up 0.9% driven by strong demand through the branch and showroom network. The new build and social housing sectors have lagged though, as have sales on major contracts. The performance of the specialist digital businesses – Underfloor Heating Store and Plumbnation – was particularly encouraging with total sales of £51m during the year representing 7% growth.
The group still plans to divest the Plumbing and heating division when market conditions are right.
Travis Perkins group CEO Nick Roberts said: “2020 was a year of unprecedented challenges and I am full of admiration for the energy and determination of our colleagues to ensure the safety of our customers, suppliers and each other. Despite these challenges, we have shown great agility and versatility in adapting our working practices, further digitalising our engagement with customers and reshaping our business to suit the changing demands of our markets. Our teams have also been able to make excellent progress on a number of key initiatives supporting our strategic objectives, particularly around simplifying commercial deals and refining our pricing architecture, which will drive future benefits. In addition, I am pleased today to be able to confirm that the process to demerge Wickes has recommenced. The Wickes digitally-led model has proved highly effective during the pandemic and the business is in great shape to embark on its journey as a standalone entity.”