Group revenue at builders and plumbers merchant group Travis Perkins rose 3.2% to £6.9bn for the financial year ended December 31 2019, the group announced this morning (March 3).
Sales were 3.8% ahead on a like-for-like basis, driven by a good performance from the Merchant businesses despite the challenging market environment, with continued excellent growth in Toolstation and a strong recovery in Wickes. The P&H business recorded a modest reduction in sales across the year, but this reduction was concentrated in the lower margin wholesale business, whilst the branch-based business continued to grow.
Merchanting sales grew by 2.6% in 2019, and by 3.3% on a like-for-like basis. Increasingly challenging market conditions in the second half of the year were the result of significant levels of political uncertainty impacting consumer confidence. The specialist merchants continued to win market share in their respective markets. Sales in CCF and Keyline were, however, impacted by the slowdown in larger projects in the fourth quarter.
In 2019, Toolstation demonstrated outstanding revenue growth of 25.7%, and 16.3% on a like-for-like basis. Growth was driven by the acceleration of the UK network expansion, with 65 branches opened in 2019, bringing the overall network up to 400. This opening profile reflects a branch opening every six days, with new branches demonstrating strong growth trends, including trials of smaller-format branches in smaller catchment areas.
Wickes showed a strong recovery in performance in 2019, with revenue growth of 7.7% and 8.7% on a like-for-like basis. Plans to demerge the business are continuing and is likely to happen in the second quarter of 2020.
Although total revenue in the P&H business fell by 4.1% in 2019, and by 1.7% on a like-for-like basis, the majority of the sales decline was concentrated in the low-margin PF&P wholesale business.
Nick Roberts, Chief Executive Officer, said: “Against a challenging market backdrop we have delivered a strong operational and financial performance across the Group. Our merchanting businesses gained market share as a result of a range of initiatives to improve our customer proposition, including increased local empowerment for our branch managers, while the pace of the Toolstation expansion accelerated. The actions 2 put in place to improve our Wickes and Plumbing & Heating businesses meant that both recovered well during the year and made positive contributions towards the Group’s overall performance.
“Our strategic progress in 2019 has been significant, but there remains much work to do in order to build stronger foundations for the Group to deliver enhanced returns and long-term growth. Our immediate priorities are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further simplification of our business and successful delivery of the demerger of Wickes.
“The long-term fundamental drivers of the Group’s end-markets remain strong, and our businesses enjoy leading positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen some green shoots of recovery in our lead indicators, although it remains too early to point towards any tangible improvement in RMI. The Group remains focused on delivering against our key priorities, and we are optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and deliver improved returns for our shareholders.”