REG-Travis Perkins Proposed demerger of Wickes Group plc and Capital Markets Event
24/03/2021 07:05
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Travis Perkins (TPK)
Proposed demerger of Wickes Group plc and Capital Markets Event
24-March-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
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24 March 2021
Travis Perkins plc
Travis Perkins plc
("Travis Perkins" or the "Group")
Proposed demerger of Wickes Group plc and Capital Markets Event
In December 2018, Travis Perkins announced a long-term strategy based
around focusing on its advantaged trade businesses and simplifying the
Group to enable a more streamlined cost structure and faster decision
making. In line with these strategic aims, and following a significant
improvement in the financial performance of Wickes Group plc ("Wickes" or
the "Company"), the Group announced the intention to demerge Wickes in
July 2019.
Having completed the vast majority of the work on the Wickes demerger, on
20 March 2020 the Group announced that it had placed the process on hold
in order to focus on managing through the COVID-19 pandemic and to
maximise liquidity across the Group. With the Group, and Wickes in
particular, having demonstrated the resilience of their operating models
in unprecedented market conditions through 2020, the Board announced the
decision to recommence the Wickes demerger process on 2 March 2021.
The demerger will enable the management teams of Travis Perkins and Wickes
to pursue their own independent strategies, each focusing on executing a
distinct business plan to deliver the best service to their primary
customer base and allocating capital in the optimum way to deliver
sustainable returns into the future.
Today marks the next milestone in the process with Travis Perkins
announcing that the Circular in relation to the proposed demerger (the
"Circular") and the Prospectus in relation to the proposed admission of
the Wickes shares (the "Prospectus") have each been submitted to the
Financial Conduct Authority (the "FCA") for approval. It is intended that
the Wickes shares will be admitted to the Premium listing segment of the
Official List of the FCA and admitted to trading on the Main Market of the
London Stock Exchange.
A further announcement will be made once the Circular and the Prospectus
have been approved for publication by the FCA, which is expected later
today.
Nick Roberts, Chief Executive Officer of Travis Perkins Group, commented:
"I am very pleased that we have reached a significant milestone in the
process to demerge Wickes from the Travis Perkins Group. It is testament
to the strength of both the Group and Wickes operating models that we are
back on track to complete the demerger despite the pandemic.
The demerger is an important step towards simplifying the Group and
enabling Travis Perkins to focus on its trade customers. The separation
will allow both businesses to allocate capital to drive growth and further
enhance their market leading positions."
David Wood, Chief Executive Officer of Wickes, commented: "This is a key
milestone on our journey to listing on the London Stock Exchange as a
standalone business in what will be a transformational moment for Wickes.
I am very proud of our performance last year amid the challenges faced by
our colleagues, our supply partners and, of course, our customers. The
results we delivered during this period are evidence of the strength of
our unique proposition, digital capability and efficient operating model,
which has enabled us to respond rapidly to the changing demands of our
customers.
The past year has prompted many of us to think differently about our how
we use our homes, and as a result, we are seeing strong demand from
customers who are looking to make changes to their living spaces. We are
able to provide customers with everything they need to achieve their home
improvement plans and we are well placed to capitalise on the exciting
growth opportunities we see in our markets while creating long-term value
for all our stakeholders. The current year has started well and we are
confident in continuing to deliver sales growth ahead of the market for
the full year."
Wickes Business Highlights
• Wickes is a digitally-led, service-enabled home improvement retailer,
delivering choice, convenience, value and best-in-class service to
customers across the United Kingdom making it well placed to
outperform its growing markets. In response to gradual structural
shifts in its markets over recent years, Wickes has rebalanced its
business to focus on three key customer journeys - Local Trade, DIY
(together "Core") and Do-it-for-me ("DIFM")
• Wickes operates in the growing home improvement market, which is
underpinned by robust fundamentals. This market has demonstrated
underlying growth of around 2.5% CAGR in the period 2013 to 2019 and
this growth is forecast to continue for the next five years. For the
period 2013 to 2020 underlying growth was 1.9% CAGR
• Wickes operates from its network of 233 right-sized stores, which
support nationwide fulfilment from convenient locations throughout the
United Kingdom, and through its digital channels including its website
and TradePro mobile app for trade members. These digital channels
allow customers to research and order an extended range of Wickes
products and services, arrange virtual and in-person design
consultations, and organise convenient home delivery or
"click-and-collect" slots
• Wickes' established, efficient and integrated service model enabled
the business to deliver a strong performance in 2020 despite
disruption caused by the pandemic. Digital customers almost doubled
and click-and- collect orders were up 450% for the year, whilst home
delivered sales increased by 120% for the year
• Three independent non-executive Directors have been added to the
Wickes Board, in addition to Christopher Rogers, Chairman. The
Directors are Mark Clare; Sonita Alleyne, OBE, FRSA; and Michael
Iddon. Details of their relevant experience are in the notes to
editors
Wickes Financial Highlights
• Wickes has demonstrated strong growth ahead of the market. From 2013
to 2019, the Group's revenue grew at a CAGR of 4.9%, increasing by
over £300m to £1,292m in 2019
• In 2020, Wickes recorded revenue of £1,347m, with 5.0% like-for-like
revenue growth, and adjusted operating profit of £82m
• The 2020 performance was driven by the strong performance of Core,
with growth of 18.8% on a like-for-like basis, leveraging Wickes'
well-developed digital and flexible fulfilment capability and
increasing market share across the year. However, DIFM was
significantly impacted in 2020 by restrictions on showroom openings
and resulted in like-for-like revenue being down by 27.8%
Current Trading and Outlook
• Performance trends in the second half of 2020 have continued into the
current financial year. Strong Core sales seen in the second half of
2020 continue whilst DIFM orders were c. 50% lower year-on-year
through the key winter sale period, as showrooms remain closed
• Whilst sales remain robust, the benefit has been offset by associated
costs with high participation of customer delivery and assuring a
COVID-19 safe operating environment for colleagues and customers
• Although the economic outlook and trading environment remains
uncertain, Wickes expects to deliver sales growth ahead of its markets
for the full year. Core growth is expected to moderate against tougher
comparatives through the year and management is confident in a
recovery of DIFM sales with pent up demand, evidenced through a high
level of enquiries, likely to come through as lockdown restrictions
ease
Details on the Prospectus and Circular
When approved by the FCA, the Prospectus and Circular will be made
available on Travis Perkins' website at
1 www.travisperkinsplc.co.uk/investors and the Prospectus will also be
made available on Wickes' website at 2 www.wickesplc.co.uk.
Details of the Capital Markets Event
The Wickes management team will host a virtual Capital Markets Update at
10.30am on Friday 26 March 2021 for investors and analysts. The
presentation will provide an overview of Wickes' resilient performance
throughout 2020, alongside a summary of its distinctive customer
proposition, financial framework and vision for the delivery of continued
growth.
The presentation will be followed by live Q&A with the Wickes management
team. To register, please sign up 3 here.
Ends
Enquiries
Travis Perkins - Investor Relations
Matt Worster +44 (0) 799 008 8548
4 matt.worster@travisperkins.co.uk
Heinrich Richter +44 (0) 739 212 5417
5 heinrich.richter2@travisperkins.co.uk
Powerscourt +44 (0) 207 250 1446
PR Adviser to Travis Perkins
Justin Griffiths, James White
6 travisperkins@powerscourt-group.com
Wickes
Investor Relations
Andy Hughes +44 (0) 777 669 2736
7 wickes@headlandconsultancy.com
Headland +44 (0) 203 805 4822
PR Adviser to Wickes
Lucy Legh, Henry Wallers, Charlie Twigg
8 wickes@headlandconsultancy.com
Citigroup Global Markets Limited +44 (0) 207 986 4000
Joint Financial Adviser, Joint Sponsor and Joint Corporate Broker to
Travis Perkins and Wickes
Andrew Seaton
Robert Redshaw
Martin Weltman
Peter Catterall
Deutsche Bank AG, London Branch +44 (0) 207 545 8000
Joint Financial Adviser, Joint Sponsor and Joint Corporate Broker to
Travis Perkins and Wickes
Charles Wilkinson
Simon Hollingsworth
Mark Hankinson
Raed El-Dana
Notes to Editors
As part of the demerger, and in keeping with requirements of the UK
Corporate Governance Code, three independent non-executive Directors have
been added to the Wickes Board, in addition to Christopher Rogers,
Chairman.
Christopher Rogers - Chairman
Chris was appointed as Chairman on 23 March 2021. Since September 2013 he
has served as a Non-Executive Director of Travis Perkins plc where until
28 April 2020 he was the Senior Independent Director. Chris is currently
Non-Executive Director of Sanderson Design Group plc (formerly Walker
Greenbank plc), a Non-Executive Director of Vivo plc and of Kerry Group,
and is a visiting fellow at Durham University. During his executive
career, Chris held a number of senior roles in and directorships of public
companies. From 2005 to 2016 Chris was an Executive Director of Whitbread
plc, serving as Group Finance Director from 2005 to 2012 and as Global
Managing Director of Costa Coffee from 2012 to 2016. He was Group Finance
Director of Woolworths Group plc and Chairman of the Woolworths
Entertainment businesses from 2001 to 2005. Prior to that, Chris held
senior roles in both the finance and commercial functions of Comet Group
plc and Kingfisher plc.
Mark Clare - Senior Independent Non-Executive Director
Mark has extensive public listed company experience in the consumer
service, property and construction sectors, particularly in customer
facing businesses and has served on a number of public listed company
remuneration committees. He is currently the Chairman of Grainger plc;
Non-Executive Director and Chairman Designate of Aggreko plc; the Senior
Independent Director at United Utilities Group plc; and Non-Executive
Director at Premier Marinas Holdings Ltd. Previously Mark was the Senior
Independent Director at Ladbroke's Coral Group plc from 2016 until 2018;
and Non-Executive Director and Audit Committee Chair at BAA plc from 2001
until 2006. Mark's executive career included Chief Executive for Barratt
Developments plc from 2006 until 2015; the Managing Director of Centrica's
retail subsidiary British Gas from 2002 to 2006; and CFO of Centrica plc
from 1997 to 2002. He also served as a trustee of the Energy Savings
Trust, the Green Building Council and BRE. Mark is a qualified accountant
and held a number of senior finance roles earlier in his career including
at Nortel, STC and GEC-Marconi.
Sonita Alleyne, OBE, FRSA - Independent Non-Executive Director
Sonita has extensive experience as a Non-Executive Director on both
private and public sector boards. She is a board member of the London
Legacy Development Corporation, The Cultural Capital Fund and The Museum
of London and recently joined the Main Advisory Committee of the Freelands
Foundation. She is the Master of Jesus College, Cambridge. Previously
Sonita was Chair of the BBFC's Management Committee and the Radio Sector
Skills Council and a board member of Archant. Sonita spent five years on
the BBC Trust and was a non-executive director of the Department for
Culture, Media and Sport. Sonita was also a board member of the National
Employment Panel and the London Skills and Employment Board. In addition,
she held membership of the Court of Governors at the University of the
Arts London.
Michael Iddon - Independent Non-Executive Director
Mike has extensive public listed company experience, having held a number
of senior finance roles throughout his career and has been the Chief
Financial Officer of Pets at Home Group plc since 2016. He was previously
the Chief Financial Officer of New Look from 2014 to 2016 and prior to
this, he held a number of senior finance roles over 13 years for Tesco plc
both in the UK and overseas. These roles included Group Planning, Tax and
Treasury Director, UK Finance Director and Chief Financial Officer of
Tesco Homeplus (South Korea). Mike has also held senior roles with
Kingfisher plc and Whitbread plc. Mike is a Chartered Accountant and a
graduate of the Harvard Advanced Management Programme.
Important Information
This announcement does not constitute an offer or invitation to sell or
issue, or a solicitation of an offer or invitation to purchase or
subscribe for any securities in any jurisdiction nor shall it (or any part
of it) or the fact of its distribution, form the basis of, or be relied on
in connection with any contract therefor.
In particular, this announcement does not constitute an offer or
invitation to sell or issue, or a solicitation of an offer or invitation
to purchase or subscribe for, any securities in the United States. The
shares of Wickes have not been, and will not be, registered under the US
Securities Act of 1933, as amended (the "US Securities Act"), and may not
be offered or sold in the United States, except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of
the US Securities Act, and in compliance with any applicable State or
local securities laws. There will be no public offer of the shares of
Wickes in the United States.
No offer of shares of Wickes will be made as part of the demerger and the
Prospectus will be published solely in connection with the proposed
admission of Wickes' ordinary shares to the premium listing segment of the
Official List and to trading on the London Stock Exchange ("Admission").
Citigroup Global Markets Limited ("Citi"), which is authorised by the
Prudential Regulation Authority ("PRA") and regulated in the UK by the
Financial Conduct Authority ("FCA") and the PRA, is acting as financial
adviser and sponsor exclusively for Travis Perkins and Wickes and for no
one else in connection with the demerger, Admission or any other matters
described in this announcement and will not be responsible to anyone other
than Travis Perkins and Wickes for providing the protections afforded to
clients of Citi nor for providing advice in connection with the demerger,
Admission, or any other matters referred to in this announcement. Neither
Citi nor any of its affiliates, directors or employees owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under statute or
otherwise) to any person who is not a client of Citi in connection with
the demerger, Admission, this announcement, any statement contained
herein, or otherwise.
Deutsche Bank AG is a joint stock corporation incorporated with limited
liability in the Federal Republic of Germany, with its head office in
Frankfurt am Main where it is registered in the Commercial Register of the
District Court under number HRB 30 000. Deutsche Bank AG is authorised
under German banking law. The London branch of Deutsche Bank AG is
registered in the register of companies for England and Wales
(registration number BR000005) with its registered address and principal
place of business at Winchester House, 1 Great Winchester Street, London
EC2N 2DB. Deutsche Bank AG is authorised and regulated by the European
Central Bank and the German Federal Financial Supervisory Authority
(BaFin). With respect to activities undertaken in the UK, Deutsche Bank AG
is authorised by the PRA with deemed variation of permission. It is
subject to regulation by the FCA and limited regulation by the PRA.
Details about the Temporary Permissions Regime, which allows EEA-based
firms to operate in the UK for a limited period while seeking full
authorisation, are available on the FCA's website. In connection with the
demerger and Admission, Deutsche Bank AG is acting through its London
branch ("Deutsche Bank"). Deutsche Bank is acting as financial adviser and
sponsor exclusively for Travis Perkins and Wickes, and no one else in
connection with the demerger and Admission, and Deutsche Bank will not
regard any other person (whether or not a recipient of this announcement)
as a client in relation to the demerger or Admission and will not be
responsible to anyone other than Travis Perkins and Wickes for providing
the protections afforded to clients of Deutsche Bank or for providing
advice in relation to the demerger or Admission or any other transaction,
matter or arrangement referred to in this announcement. Neither Deutsche
Bank nor any of its affiliates, directors or employees owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under statute or
otherwise) to any person who is not a client of Deutsche Bank in
connection with the demerger, Admission, this announcement, any statement
contained herein, or otherwise.
This announcement has been issued by and is the sole responsibility of
Travis Perkins. No representation or warranty, express or implied, is or
will be made, as to or in relation to, and no responsibility or liability
is or will be accepted by either of Citi or Deutsche Bank or by any of
their respective affiliates, directors, officers, employees or advisers
for the contents of this announcement, including its accuracy,
completeness and verification or for any other statement made or purported
to be made by either of them, or on behalf of either of them in connection
with Travis Perkins, Wickes, the Group, the Wickes Group, the demerger or
Admission.
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are based on current beliefs
and expectations and are subject to a number of known and unknown risks
and uncertainties that may cause actual results, performance or
achievements of the Group or the Wickes Group or industry results to
differ materially from any future events, results, performance or
achievements expressed or implied by such forward-looking statements.
These forward-looking include all matters that are not historical facts.
Forward-looking statements speak only as of the date of this announcement.
Persons receiving this announcement should not place undue reliance on any
forward-looking statements. Unless otherwise required by applicable law or
regulation, each of Travis Perkins, Wickes and their advisers (including
Citi and Deutsche Bank) disclaims any obligation or undertaking to update
or revise any forward-looking statements, whether as a result of new
information, future developments or otherwise.
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ISIN: GB0007739609
Category Code: PDI
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 96102
EQS News ID: 1177758
End of Announcement EQS News Service
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