REG-Travis Perkins Travis Perkins plc - COVID-19 update

Travis PerkinsAnnouncement

20/03/2020 08:10

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   Travis Perkins (TPK)
   Travis Perkins plc - COVID-19 update

   20-March-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.

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   20 March 2020

    

                      Travis Perkins plc - COVID-19 update

    

   The  Group's  trading  performance   in  2020  has   been  in  line   with
   expectations, with  solid  trading in  the  Merchanting businesses  and  a
   strong start in  Toolstation and Wickes.  Total Group sales  grew by  2.4%
   year-to-date 1  1 , and recent  trading has  not yet  shown a  significant
   sales impact as a result of COVID-19.

    

   However, due  to  the  rapidly  evolving  situation  and  the  dynamic  UK
   Government response  to the  impact  of COVID-19,  the Group  expects  the
   trading environment to change quickly and materially in the coming  weeks.
   In response to  this, the Board  is taking prudent  decisions in order  to
   successfully navigate this period of turmoil. These include the suspension
   of the proposed  full-year 2019  dividend and  the pausing  of the  Wickes
   demerger process in light of current extreme stock market volatility.

    

   Robust financial position

   The Travis Perkins Group enters  the expected coming period of  volatility
   in a strong position and with a robust balance sheet.

    

   The Group has significant liquidity headroom;  at 19 March 2020 the  Group
   held £185m of cash on deposit, in addition to an undrawn revolving  credit
   facility (RCF) of £400m. The Group maintains a close relationship with its
   core lending  syndicate. Overall,  the Group's  debt maturities  are  well
   spread with no immediate refinancing required.

    

   Mitigating actions

   Taking into account the current level of uncertainty, and the  possibility
   of considerable  disruption  to  the economy,  the  construction  and  RMI
   markets and  to the  Group's business,  the Board  has taken  the  prudent
   decision to suspend the final dividend payment of 33.0p per ordinary share
   that was proposed with the announcement of the full-year 2019 results on 3
   March 2020.

    

   Should the  Group experience  a  reduction in  sales volume,  either  from
   enforced store  closures  or a  wider  reduction in  economic  and  market
   activity, plans are in  place to balance  the protection of  profitability
   and preservation of operating  cash flow with the  long-term needs of  the
   business. Actions include  reducing operating costs  where sensible to  do
   so, a  robust  assessment of  all  capital expenditure  requirements,  and
   careful management of inventory and other working capital. The Group  will
   make use  of tax  relief  and other  Government  measures as  they  become
   available.  

    

   Wickes demerger

   Good progress has been made in recent months to prepare for the separation
   of Wickes. However, given the current level of uncertainty surrounding the
   impact of COVID-19  on the  Group's end markets,  as well  as the  extreme
   volatility in global and UK equity  markets, the Board has concluded  that
   it would be prudent to pause the Wickes demerger process so that the Board
   and our colleagues  can focus on  managing the Group  through the  current
   challenges.

    

   Whilst it is  impossible to know  exactly when it  will be appropriate  to
   re-start the demerger  process, the intent  to demerge remains  unchanged,
   and we believe that we are in an advanced state of preparedness and  would
   hope to be able to move forward swiftly when it is appropriate to do so.

    

   Outlook

   The current level of uncertainty  means it is too  early for the Group  to
   provide an  accurate assessment  on trading  and the  Group withdraws  all
   market guidance in the near-term.  The Group will provide further  updates
   when there is  greater clarity on  the impact of  COVID-19 on the  trading
   environment.

    

   Nick Roberts, CEO, commented:

    

   "Our highest  priority  is  the  health  and  safety  of  our  colleagues,
   customers, suppliers  and  all  other  stakeholders,  and  we  have  taken
   decisive action to  mitigate the risks  we are facing  as a business,  and
   implementing  contingency  plans  across  the  Group.  We  are  absolutely
   committed to fulfilling the essential role we play in the UK  construction
   industry supply  chain  in  keeping  the  UK  dry,  warm,  maintained  and
   operational; providing materials, working capital funding and support  for
   our trade customers, large and small.

    

   "Whilst there is unprecedented uncertainty on how the virus outbreak  will
   directly impact our markets and our businesses, we enter this period  from
   a position  of strength  and security,  with a  strong balance  sheet  and
   access to significant committed liquidity."

    

   Enquiries:

   Travis Perkins                         Powerscourt
   Graeme Barnes                          Justin Griffiths / James White
   +44 (0) 7469 401819                    +44 (0) 207 2501446
    2 graeme.barnes@travisperkins.co.uk   travisperkins@powerscourt-group.com
                                           

    

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    3  1  Total sales growth to 18 March 2020, excluding Toolstation Europe
   and PF&P wholesale

    

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   ISIN:          GB0007739609
   Category Code: MSCM
   TIDM:          TPK
   LEI Code:      2138001I27OUBAF22K83
   Sequence No.:  53575
   EQS News ID:   1002527


    
   End of Announcement EQS News Service

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References

   Visible links
   1. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_15ACEdfz.html#_ftn1
   2. mailto:graeme.barnes@travisperkins.co.uk
   3. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_15ACEdfz.html#_ftnref1


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