Travis Perkins pushes sales past £6bn

Builders merchant group Travis Perkins saw its 2018 sales rise to £6,741m, an increase of 4.8% against a market backdrop of considerable uncertainty.

Sales and operating profit improved in the General Merchanting division in H2, and whilst the UK DIY market was particularly challenging due to both macro and competitive pressures, the Wickes business’ performance also improved in H2.

Both the Contracts businesses and Toolstation outperformed their end markets. The Plumbing & Heating division, which was put up for sales at the end of 2018, saw significant sales growth, achieving £1,528m and winning market share throughout its branch network.

The General Merchanting division increased sales by 1.4% to £2,137m Strong revenue growth continued in the Contracts division, growing 7.5% in total, and by 7.0% on a like-for-like basis. Sales growth was strong in all three businesses, with price growth of 4.5% to mitigate input cost inflation and 2.5% volume growth reflecting continued market share gains. After a difficult start to the year in Q1, with markets suffering uncertainty following the collapse of Carillion, the division maintained a strong like-for-like growth rate throughout the remainder of the year. Network developments continue in Keyline as the business aims to relocate and consolidate branches into lower cost sites, and providing fit-for-purpose branches for customers and colleagues. In 2018, eight branches were closed (including one transferred to the Travis Perkins brand), with two new, low cost branches opened.

Wickes, which operates in an ‘extremely challenging retail environment’, saw revenues decline by 2.5% in 2018, and by 4.4% on a like-for-like basis.

The Group also announced a restructuring which will aim to reduce overhead costs and speed up decision making. A key component of this is the removal of the existing divisional structure above the Merchanting businesses and streamlining central functions to support businesses directly. The revised structure will alter how the businesses are managed and reported. From 2019, the Group will report under the following segments: Merchanting, Toolstation, Retail and Plumbing & Heating.

Merchanting includes the brands Travis Perkins, Keyline, CCF, BSS and Benchmarx. Retail business are Wickes and Tile Giant, Plumbing and Heating encompasses PTS, City Plumbing Supplies,  F & P Wholesale and specialist online businesses the Underfloor Heating Store, Direct Heating Spares and National Shower Spares. Toolstation will become a stand-alone division.

Chief executive officer John Carter said: “In the longer term, the Group remains focused on generating sustainable profitable growth for shareholders and we will achieve this by allocating capital and resources to our most advantaged businesses. We are making good progress on the preparation for the disposal of the Plumbing & Heating division, and are seeing an encouraging improvement in trading and good momentum in Wickes.

“Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term. The Group remains focused on self-help actions to underpin performance in the near term, whilst continuing to invest for the future.”