Travis Perkins: Q3 2020 trading update - continued recovery (1142325)
22 October 2020 - 5:00PM
UK Regulatory
Travis Perkins (TPK)
Travis Perkins: Q3 2020 trading update - continued recovery
22-Oct-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
22 October 2020
Travis Perkins plc - Q3 2020 trading update - continued recovery
Highlights
· Group like-for-like revenue growth of 3.9% in Q3
· Strong demand through domestic RMI sales continued, driving the strong
performance in Wickes, Toolstation and local trade market
· Lag in recovery of larger customer activity, including new housebuilding
and larger construction projects
· Group liquidity remains strong, GBP980m of liquidity headroom at 30
September 2020
Q3 2020 sales Merchanting1 Toolstation1 Retail2 P&H1 Group
growth
Like-for-like (3.1)% 25.5% 18.3% 0.40% 3.9%
sales growth
Net space (7.4)% 8.9% (1.0)% (4.2)% (4.9)%
change
Acquisitions / - 15.5% - (16.6)% (2.4)%
disposals
Trading days - - - - -
Total sales (10.5)% 49.9% 17.3% (20.4)% (3.4)%
growth
Two-year (1.5)% 44.8% 29.8% 0.4% 7.4%
like-for-like
YTD 2020 sales Merchanting1 Toolstation1 Retail2 P&H1 Group
growth
Like-for-like (18.4)% 17.3% 0.2% (15.6)% (11.8)%
sales growth
Net network (2.6)% 8.8% (0.8)% (1.0)% (1.4)%
changes
Acquisitions / - 15.1% - (12.8)% (1.8)%
disposals
Trading days 0.4% 0.4% - 0.4% 0.4%
Total sales (20.6)% 41.6% (0.6)% (29.0)% (14.6)%
growth
Nick Roberts, Chief Executive, commented:
"We have reported a positive overall like-for-like sales performance in the
quarter as our markets have continued to recover following the impact of the
national lockdown earlier this year. This has been driven by a strong
recovery in demand across domestic RMI markets, benefitting the Travis
Perkins, City Plumbing, Wickes and Toolstation businesses who serve these
markets. Currently this domestic RMI trend remains strong.
Whilst local trade activity has recovered well, our trade businesses
continue to experience a lag in recovery from larger housebuilding and
construction projects. However, there are signs of increasing workflow
across these sectors as underlying demand strengthens as businesses have
adapted to new and safe ways of working that enable them to keep sites open
during periods of local lockdown.
During the quarter, we have made further progress in strengthening the core
of our trade businesses, in addition to completing the disposal of Tile
Giant.
Our excellent cash generation this year has built a strong liquidity
position, and combined with the decisive actions taken in June to realign
our cost base to the new trading environment we are confident in both the
Group's ability to navigate the near-term uncertainty, as well as our
position for the long term as we build towards becoming the leading partner
for the construction industry."
Business performance
Like-for-like sales grew by 3.9% in Q3, although total Group sales declined
by 3.4%, reflecting branch closures since June. There was no net impact of
trading days in the quarter, compared with the same period in 2019. Across
the Group there was no appreciable impact from price inflation, with the
change in sales driven by volume.
There have been significant differences in performance across the Group's
end markets, with particular strength in domestic RMI, manifesting as strong
sales in DIY categories in Wickes and Toolstation, and good trading levels
with local trade customers in Toolstation, Travis Perkins and P&H. By
contrast, the larger end of customer activity has been slower to return to
normal, and at the end of September both new housebuilding and commercial
construction continue to run at levels some way below 2019, specifically
impacting the specialist merchants and elements of the P&H business.
The progression of sales recovery has continued throughout Q3, particularly
in the trade focused businesses. During July, volumes picked up strongly as
markets exited the lockdown period. Trading in August was modestly softer,
impacted by a protracted holiday season, before then picking up again in
September in line with schools reopening and many trades returning to a more
normal work schedule.
Continued buoyancy in the DIY markets and a more encouraging trend in trade
focused markets in September has driven like-for-like growth of 8% for the
month, with total sales growth, adjusted for trading days, of around 0.3%.
The difference between LFL sales and total sales performance was primarily
due to the impact of the merchanting branch closures in June and the
disposal of PF&P, partially reduced by the acquisition of Toolstation
Europe.
Across the Merchant and P&H segments, whilst the branch closures announced
in mid-June were significant drivers of the reduction in total sales,
businesses have successfully migrated a significant proportion of sales to
nearby branches, in line with management expectations. This has been
particularly true for larger customers who already trade with multiple
branches and customers of the specialist merchants where a higher proportion
of sales are delivered. At a Group level, this retention of sales added
around 3% to like-for-like performance.
Liquidity position
The Group continues to maintain a strong liquidity position, with GBP580m of
cash on deposit at 30 September combined with the undrawn RCF giving overall
headroom of GBP980m.
Portfolio development
The Group completed the sale of the Tile Giant business on 30 September.
This demonstrates a further step towards the simplification of the Group,
and to focus on our advantaged trade businesses.
Outlook
During Q3 the Group's end markets have shown an encouraging recovery from
the lockdown period, however significant uncertainty remains from both the
pandemic and the ongoing Brexit negotiations, making it hard to forecast
performance in the near-term. Based on the assumption that current volume
trends continue, including the ongoing strength in DIY sales, and that any
further lockdown measures introduced do not have a significant impact on the
Group's end markets, the Group expects its EBITA performance for 2020 to be
in the upper half of the current range of analysts' expectations3.
Enquiries:
Travis Perkins Powerscourt
Graeme Barnes Justin Griffiths / James White
+44 (0) 7469 401819 +44 (0) 207 2501446
graeme.barnes@travisperkins.co.uk travisperkins@powerscourt-group.com
Heinrich Richter
+44 (0) 7392 125417
heinrich.richter2@travisperkins.co.uk
Footnotes
1) Like-for-like sales growth for the three month period ended 30
September 2020 compared to the three month period ended 30 September 2019.
Total sales growth for the three month period ended 30 September 2020
compared to the three month period ended 30 September 2019.
2) Wickes like-for-like and total sales growth for the 13 week period
ended 26 September 2020 compared to the 13 week period ended 28 September
2019.
3) Company compiled market consensus for FY 2020 Group EBITA as at 15
October 2020, calculated from 14 analysts, of GBP239m (range of GBP222m to
GBP261m).
ISIN: GB0007739609
Category Code: TST
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
Sequence No.: 86339
EQS News ID: 1142325
End of Announcement EQS News Service
(END) Dow Jones Newswires
October 22, 2020 02:00 ET (06:00 GMT)
Travis Perkins (LSE:TPK)
Historical Stock Chart
From Apr 2024 to May 2024
Travis Perkins (LSE:TPK)
Historical Stock Chart
From May 2023 to May 2024