REG-Travis Perkins Travis Perkins plc: Full year results for the year to 31 December 2022
28/02/2023 07:15
============
Travis Perkins (TPK)
Travis Perkins plc: Full year results for the year to 31 December 2022
28-Feb-2023 / 07:00 GMT/BST
══════════════════════════════════════════════════════════════════════════════════════════════════════════
28 February 2023
Travis Perkins plc, a leading partner to the construction industry, announces its full year results for
the year to 31 December 2022
A resilient trading performance in rapidly changing market conditions
Financial Highlights
• Robust revenue growth of 8.9% with elevated levels of materials cost inflation diligently managed
• Adjusted operating profit of £295m, impacted principally by lower year-on-year property profits and a
£15m charge related to restructuring activities in Q4
• Adjusted earnings per share of 94.6p with lower operating profit partially offset by reduced share
count
• Proactive cost actions to deliver benefits of around £25m in 2023
• Good cash conversion at 67%; lease-adjusted leverage (net debt / EBITDA) of 1.8x remains comfortably
within target range
• Total ordinary dividend increased to 39.0 pence per share (2021: 38.0 pence per share)
Operational Highlights
• Solid performance in the Travis Perkins General Merchant, with further share gains, driven by focus on
enhancement of digital capability and expansion of value-added services primarily across Hire,
Benchmarx kitchens and Managed Services
• Continued strong performance from the Group’s specialist distributors – BSS, Keyline and CCF.
Staircraft now integrated and enhancing the Group’s housebuilder proposition.
• Toolstation returned to good growth in H2 after tough prior year comparatives in H1. Significant
investment in expanding infrastructure across both the UK and Europe.
• Positive progress towards sustainability targets, notably a 34% reduction in Scope 1 & 2 carbon
emissions during the year
£m (unless otherwise stated) Note 2022 2021* Change
Revenue 6 4,995 4,587 8.9%
Adjusted operating profit¹ 7a 295 353 (16.4)%
Adjusted operating profit excluding property profits and restructuring charge¹ 285 304 (6.3)%
Adjusted earnings per share¹ 15b 94.6p 107.3p (11.8)%
Adjusted ROCE¹ 18 10.8% 14.1% (3.3)ppt
Adjusted ROCE excluding property profits and restructuring charge¹ 10.5% 12.1% (1.6)ppt
Net debt / adjusted EBITDA¹ 19 1.8x 1.2x (0.6)x
Ordinary dividend per share 14 39.0p 38.0p 2.6%
Operating profit 285 349 (18.3)%
Total profit after tax 192 241 (20.3)%
Basic earnings per share 15a 90.8p 103.9p (12.6)%
(1) Alternative performance measures are used to describe the Group’s performance. Details of calculations
can be found in the notes listed.
* For continuing businesses only. The Retail and Plumbing & Heating segments are treated as discontinued
operations.
Nick Roberts, Chief Executive Officer, commented:
“The Group delivered a resilient trading performance in 2022 which is testament to the capability of our
colleagues and the strength of our market leading propositions. I would like to thank our teams for their
hard work throughout the year and their flexibility to meet customer needs amidst rapidly changing market
dynamics.
In the second half of the year we made some difficult decisions in response to the weaker trading
environment and we continue to be watchful of market trends, working closely with our customers and
suppliers to stay on the front foot. Investment continues in our strategic growth programmes including
selectively exploring new destination branches for the Travis Perkins General Merchant, rolling out
Toolstation in both the UK and Europe and investing in growing our value-added services, notably Hire,
Benchmarx kitchens and our Staircraft business, always being mindful to flex the pace of the programme to
reflect market conditions.
Whilst it is early in the year and macroeconomic uncertainty remains, the combination of our diverse end
market exposure, appropriate cost actions and further market share gains driven by continued strategy
execution, will enable the Group to deliver another resilient trading performance in the year ahead.
As a market-leading distributor of building materials products, we continue to benefit from long-term
strategic growth drivers in our markets including new environmental and safety legislation and commitments
from both public and private sector customers to deliver against net zero targets. We are committed to
being at the forefront of both decarbonising the construction industry alongside developing the next
generation of talent to create value for all of our stakeholders.”
Analyst Presentation
Management are hosting a results presentation at 8.30am. For details of the event please contact the
Travis Perkins Investor Relations team as below. The presentation will also be available via a listen-only
webcast - please register at the following link:
https://stream.brrmedia.co.uk/broadcast/63caa8e1777efd4a8b51373b
Enquiries:
Travis Perkins FGS Global
Matt Worster Faeth Birch / Jenny Davey / James Gray
+44 (0) 7990 088548 +44 (0) 207 251 3801
matt.worster@travisperkins.co.uk TravisPerkins@fgsglobal.com
Cautionary Statement:
This announcement contains “forward-looking statements” with respect to Travis Perkins’ financial
condition, results of operations and business and details of plans and objectives in respect to these
items. Forward-looking statements are sometimes, but not always, identified by their use of a date in the
future or such words as “anticipates”, “aims”, “due”, “could”, “may”, “will”, “should”, “expects”,
“believes”, “seeks”, “intends”, “plans”, “potential”, “reasonably possible”, “targets”, “goal” or
“estimates”, and words of similar meaning. By their very nature forward-looking statements are inherently
unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that could cause actual results
and developments to differ materially from those expressed or implied by these forward-looking statements.
These factors include, but are not limited to, the Principal Risks and Uncertainties disclosed in the
Group’s Annual Report and as updated in this statement, changes in the economies and markets in which the
Group operates; changes in the legislative, regulatory and competition frameworks in which the Group
operates; changes in the capital markets from which the Group raises finance; the impact of legal or other
proceedings against or which affect the Group; and changes in interest and exchange rates. All
forward-looking statements, made in this announcement or made subsequently, which are attributable to
Travis Perkins or any other member of the Group or persons acting on their behalf are expressly qualified
in their entirety by the factors referred to above. No assurances can be given that the forward-looking
statements in this document will be realised. Subject to compliance with applicable law and regulations,
Travis Perkins does not intend to update these forward-looking statements and does not undertake any
obligation to do so. Nothing in this document should be regarded as a profits forecast.
Without prejudice to the above:
(a) neither Travis Perkins plc nor any other member of the Group, nor persons acting on their behalf shall
otherwise have any liability whatsoever for loss howsoever arising, directly or indirectly, from the use
of the information contained within this announcement; and
(b) neither Travis Perkins plc nor any other member of the Group, nor persons acting on their behalf makes
any representation or warranty, express or implied, as to the accuracy or completeness of the information
contained within this announcement.
This announcement is current as of 28th February 2023, the date on which it is given. This announcement
has not been and will not be updated to reflect any changes since that date.
Past performance of the shares of Travis Perkins plc cannot be relied upon as a guide to the future
performance of the shares of Travis Perkins plc.
Summary
2022 was a challenging year and the Group adapted well to rapidly changing market conditions, making
further progress towards its ambition of being the leading partner to the construction industry. The Group
will continue to balance delivery of near-term performance with longer term strategic objectives as it
focuses on outperforming its end markets and generating strong cash flow to invest in strategic
initiatives and provide attractive returns to shareholders.
2022 Performance
The Group delivered a resilient performance with revenue of £4,995m, up 8.9% versus 2021. The Merchanting
businesses delivered further market share gains and Toolstation returned to good growth in the second half
of 2022 following tough comparatives in the first half. The Group again demonstrated its ability to
recover significant levels of materials cost inflation and continues to benefit from its diverse end
market exposure.
While adjusted operating profit of £295m was £(58)m, or (16)%, lower than in 2021, this was predominantly
driven by lower year on year property profits (£(24)m) and £(15)m of restructuring charges associated with
the Group’s cost reduction actions. Despite two fewer trading days (impacting operating profit by around
£(9)m), the Merchanting segment improved its underlying operating profit performance with further market
share gains. Although second half performance was good, full year operating profit in Toolstation was
significantly lower than prior year as the business faced very challenging first half comparatives and
continued to invest in its distribution and network capability across both the UK and Europe to underpin
future growth.
As outlined in the September 2021 strategic update, the Group is focusing on elevating relationships with
customers through the growth of value-added services. This approach is paying dividends with the
value-added services representing around 16% of Group revenue.
Maintaining operational agility and discipline in capital allocation
With the expectation of lower levels of activity in the UK construction sector in the year ahead,
management implemented a number of cost reduction actions in Q4 2022 to ensure that the Group’s cost base
appropriately reflects the trading environment. These actions are expected to deliver around £25m of cost
savings in 2023 with the cost to achieve those savings, of around £15m, recognised in 2022.
These actions resulted in the closure of 19 branches in the General Merchant and Benchmarx and a headcount
reduction of approximately 400 across those branches and central support functions. These changes
represent an acceleration of plans to modernise the business by exiting smaller branches and continuing to
invest in larger, more capable, destination branches which incorporate value-added services such as Hire
and kitchen showrooms.
The Group also flexed its capital investment programme in the year to reflect the trading environment with
spend being around £15m lower than medium term guidance (of £125m p.a.). This prudent approach will
continue into 2023 with capital spend anticipated to be c. £25m lower than medium term guidance at around
£100m.
Capital structure and shareholder returns
The Group has set a medium-term leverage target of 1.5x – 2.0x net debt / adjusted EBITDA (on an IFRS 16
basis), this target range being consistent with investment grade credit metrics. The Group’s balance sheet
remains strong with year-end net debt / adjusted EBITDA in the middle of the target range at 1.8x, leaving
the Group well positioned to navigate the current uncertain market conditions. The current leverage
position, together with the cash generative nature of the business, allows the Group scope to continue to
invest in driving future growth while also returning surplus capital to shareholders when towards the
lower end of this target range.
Given the strong balance sheet position and confidence in the prospects for the Group, the Board has
proposed an increase in the dividend to 39.0 pence per share (2021: 38.0 pence per share).
Outlook
Management is mindful of the current macroeconomic uncertainty and, in line with industry forecasts, is
planning for a decline in overall market volumes in the mid to high single digit range in 2023. This will
vary across end markets with private domestic new-build and RMI more challenged while the commercial,
industrial and public sectors are expected to remain more resilient.
Product cost inflation is expected to moderate into 2023 although Management does not currently expect to
see any notable deflation in manufactured products. Management therefore expects to see mid to high single
digit percentage product cost inflation overall driven by the rollover of prior year increases and further
new increases already announced so far this year.
Whilst the expected market dynamics point to a challenging year ahead, Management continues to anticipate
delivering a performance in line with market expectations. The actions taken to create a more agile
business, with broad end market exposure, enable management to remain confident in the Group's ability to
outperform its markets and deliver attractive returns to shareholders over the medium term.
Technical guidance
The Group’s technical guidance for 2023 is as follows:
• Effective tax rate of 25%
• Base capital expenditure of around £100m
• Property profits of around £20m
Segmental performance
Merchanting
2022 2021 Change
Revenue £4,220m £3,826m 10.3%
Adjusted operating profit* £314m £320m (1.9)%
Adjusted operating profit excluding restructuring charges* £329m £320m 2.8%
Adjusted operating margin* 7.4% 8.4% (100)bps
Adjusted operating margin excluding restructuring charges* 7.8% 8.4% (60)bps
ROCE** 15% 16% (1)ppt
Branch network 767 781 (14)
* Excluding property profits
The Merchanting segment delivered a robust performance overall with revenue up by 10.3% and growth in
operating profit** of 2.8% to £329m. After significant price increases during 2021, driven by a rapid
post-pandemic recovery in demand, price inflation continued to accelerate through 2022 before moderating
slightly in the fourth quarter. Increases were mainly driven by manufacturers passing through rising
energy costs with prices increasing by around 15% in H1, rising to around 17% in H2. The Merchanting
businesses have again managed these challenges well through proactive engagement with customers and
providing transparency.
Since 2018, the significant programme of work to evolve the customer proposition and empower the branch
teams has delivered strong financial benefits. Supported by a rationalisation of the network and much
improved data to aid in-branch decision making, operating profit has grown by 18%**, £95m of capital has
been removed and ROCE has moved forward by 280 bps**. The Group is confident in its ability to make
further progress on these metrics.
From an end-market perspective, the Merchanting segment benefits from broad exposure providing a degree of
insulation from volatility in any one end market.
The Private domestic RMI market represents approximately 35% of Merchanting revenue and is primarily
serviced by the Group’s General Merchant business working with smaller trade customers. Following a
strong start to the year, volume performance weakened against a tough comparator period and this was
exacerbated in the second half by high levels of materials inflation and increasing macroeconomic
uncertainty, leading to home-owners delaying or reducing the scope of improvement work. The challenging
backdrop seen in the second half of the year is expected to continue into 2023.
For the smaller trade customer the focus remains on the core elements of service. For account customers
the number of managed accounts has been increased and for non-account customers, who are more transient in
nature, further improvements have been made to ensure transparent and consistent pricing, complemented by
the right range and depth of stock in branch. These improvements have been backed up by further
investments in our hire fleet and sales team, driving increased penetration, and in our digital
proposition.
The private domestic new-build market represents approximately 19% of Merchanting revenue and is primarily
serviced by Keyline, CCF and Staircraft working with national and regional housebuilders. The businesses
engage at different stages of the build process with Keyline typically first on site and CCF and
Staircraft delivering at a later stage of the process. While the housing market slowed later in H2, this
did not feed through notably into volumes as completions continued but is expected to be seen in 2023 with
new housing starts currently forecast to slow.
Within this sector, the Group continues to enjoy long standing partnerships with the major national
housebuilders and to focus growth initiatives on the regional housebuilder market where the introduction
of Staircraft and the development of the Benchmarx proposition are providing customers with innovative
solutions to reduce waste, complexity and the need for specialist labour. CCF and Keyline continue to
enhance their proposition in this market by using newly developed data and delivery management capability
to provide data on embodied carbon which is helping customers to address changing preferences, manage
projects more effectively and win work.
The commercial and industrial market represents approximately 22% of Merchanting revenue and incorporates
new build and refurbishment activity across offices, warehouses, multi occupancy and student accommodation
alongside industrial maintenance. The market is primarily serviced by the Group’s BSS and CCF businesses.
This sector held up well during the year with a post-pandemic backlog of work remaining and an increasing
requirement for logistics space and office remodelling, a trend that is expected to continue.
The public sector market represents approximately 24% of Merchanting revenue and covers projects across
infrastructure, public assets such as schools, hospitals and prisons, and social housing maintenance. The
market is primarily serviced by the Group’s BSS, Keyline and Travis Perkins Managed Services businesses.
Demand remained robust in this market throughout the year with ongoing government backing for investment
in public buildings and infrastructure alongside the continued catch up in social housing maintenance and
the impact of tighter legislation on social housing standards. These factors are expected to continue to
support demand into next year.
Adjusted operating margin** reduced by (60)bps as a result of the dilutive effect of very high levels of
inflation on the gross margin percentage and also a shift in customer mix towards larger accounts where
gross margins are lower. Although the Merchant businesses experienced high levels of overhead inflation,
with significant increases in payroll, utility and fuel costs leading to overall overhead inflation of
around 7%, this was proactively managed and the cost to serve percentage remained in line with prior year.
** Excluding £15m restructuring charge in 2022
Toolstation
2022 2021 Change
Revenue £775m £761m 1.9%
Like-for-like growth (3.7)% 12.3%
Adjusted operating profit £(9)m £22m (140.9)%
Adjusted operating margin (1.1)% 2.9% (400)bps
ROCE (2)% 5% (7)ppt
Branch network (UK) 563 530 33
Branch network (Europe) 158 123 35
Memo: UK adjusted operating profit £21m £42m (50.0)%
Overall, 2022 proved a challenging year for Toolstation as financial performance reflected further
significant investment in network and distribution capabilities to build the business for the future
alongside lower DIY-related volumes following exceptional sales during the pandemic. Performance improved
through the year with revenue growth in H2 of 8.9% compared to a fall of (4.6%) in H1.
UK adjusted operating profit fell to £21m given the volume impact, continued infrastructure investment and
overhead inflationary pressures. Toolstation will continue to focus its propositional development on the
trade customer base given the higher frequency of orders, larger basket size and better product mix which
provide a more predictable revenue stream and a larger market opportunity.
A further 33 branches were added to the UK network during 2022 taking the total to 563. Reflecting
macroeconomic conditions, the pace of rollout was slowed and this will also be the case in 2023 with
around 10 new branches planned to open. Having opened 268 new branches since 2017, only around half of the
network is mature and, with new branches continuing to perform at least in line with mature cohorts, these
branches have the potential to add over £300m of revenue over the next five years.
The Group has invested £28m to date (£17m in 2022) in a new c. 500,000 square foot distribution centre in
Pineham, Northamptonshire which incorporates automation technology and will initially provide the
capability to fulfil direct to customer orders. The facility is due to be fully operational by the second
half of 2023 and is an important strategic investment both to support revenue growth and increase
operational efficiency.
The European business saw very similar dynamics in terms of both revenue and operating profit performance.
Benelux continues to progress well and, with 27 further branches added to take the total to 113, is
approaching the “critical mass” required to take the business into profitability. During the year the
Group also invested in a second distribution facility in the Netherlands with around 200,000 square feet
of capacity which will provide the capability to build the network out to around 250 branches. In France,
where sales grew by 50%, 8 new branches were added to take the total to 45 as the business continues to
refine the customer service proposition alongside optimising the choice of location and local market
plans.
With the European business investing for the future and also experiencing similar volume dynamics as the
UK, losses for the year were £30m. A similar outcome is expected in 2023 although this will reflect
narrowing losses in the Netherlands and the impact of increased investment in France and Belgium.
Central costs
Central costs reduced by £3m year-on-year due principally to lower management incentive payments.
Property
The Group generated a property profit of £25m in the year, in line with the long run average, with £12m of
cash proceeds. The majority of the profit relates to a site sold in Cambridge for which consideration of
£22m is deferred to 2023 / 24.
For 2023 the Group expects property profits of around £20m with cash receipts in excess of that figure.
Building for better
Recognising the impact that the sharply increasing cost of living in the UK had on colleagues, the Group
offered financial wellbeing advice and support and additional benefits where possible as well as
maintaining a strong focus on building a safety culture where everyone returns home safe and well every
day.
Looking externally, in 2022 the Group undertook an in-depth ESG materiality assessment, engaging with
stakeholders to deepen the Group’s understanding of the ESG issues that matter most to a range of
different audiences. While the assessment confirmed that the focus areas within the previous framework
remain relevant, it demonstrated that carbon is the principal issue for stakeholders, making it the
Group’s sustainability priority moving forwards.
In 2021, the Group set out targets for reduction in Scope 1, 2 and 3 carbon that were approved by the
Science-Based Target initiative (“SBTi”) as being in line with a 1.5˚ pathway as below:
• A commitment to reduce Scope 1 and 2 carbon (relating to the Group’s fleet and estate) by 80% by 2035,
offsetting any remaining emissions thereafter
• On Scope 3, which represents 99% of the Group’s footprint, targeting a 63% carbon reduction in the
Group’s supply chain emissions by 2035, primarily focused on purchased goods and services
(manufactured carbon) and the in-use emissions of goods sold
Further information, including the Group’s roadmaps to 2035 for scopes 1, 2 and 3, can be found on its
corporate website (https://www.travisperkinsplc.co.uk).
With regards to progress on carbon reduction during the year, the Group made excellent progress with Scope
1 & 2 footprint reduced by 34%, which is a 35% reduction against the 2020 baseline. Scope 3 carbon reduced
by 2% year-on-year and 54% of product spend was with suppliers who are engaged on carbon.
The Group set interim targets for 2027 during the year with plans in place to reduce carbon by 40% across
the Group’s property portfolio and by 27% across the Group’s fleet, both against the 2020 baseline.
The Group has also set out an ambitious target to upskill both its people and those across the wider
sector in Green and Future skills with 10,000 graduated apprentices by 2030. During the year the Group saw
its 1,000th apprentice graduate and, as part of the overall programme, is now the Early Careers and
Apprenticeship provider to the Builders Merchant Federation with 340 people from outside the Group
enrolled on a Travis Perkins delivered apprenticeship.
Financial Performance
Revenue analysis
As revenue comparatives normalised post the impacts of the pandemic, the Merchanting business and
Toolstation saw contrasting dynamics though 2022.
The Merchanting business saw robust overall revenue growth driven by price inflation which accelerated
rapidly through the year before slightly moderating in the fourth quarter. With the Merchanting pricing
model largely based around the pass through of materials cost price inflation, as manufacturer increases
picked up from the second quarter onward (due primarily to energy cost increases), this fed through into
sales price inflation as the Merchant businesses passed through these increases in a disciplined manner.
Overall volumes weakened sequentially throughout the year, notably in the smaller customer segment of the
private domestic RMI market, with the impact of inflation, normalisation of comparatives from a very
strong market in 2021 and concerns over project affordability weighing on sentiment.
Toolstation experienced significant volume decline in the first half as the business cycled pandemic
impacted comparatives before returning to solid revenue growth in the second half with volumes broadly
flat. Whilst the impact of materials cost inflation was not as pronounced on lightside products as on
heavyside, inflation was still notable at around 9%. The Toolstation team have had to carefully balance
the requirement to recover materials cost inflation with the desire to maintain value leadership with
recent performance demonstrating that this has been managed well.
Merchanting revenue was 14% ahead of 2019 levels. Taking into account the reduction in space due to the
2020 restructuring and three-year cumulative inflation, Merchanting volumes were broadly in line with
2019. Toolstation revenues are around 74% ahead of 2019. On a similar basis and adjusting for the impact
of consolidating Toolstation Europe, volumes are around 45% higher than 2019.
Volume, price and mix analysis
Merchanting Toolstation Group
Volume (5.8)% (7.1)% (6.0)%
Price and mix 16.1% 9.0% 14.9%
Total revenue growth 10.3% 1.9% 8.9%
Network changes and acquisitions / disposals (2.4)% (5.9)% (3.0)%
Trading days 0.8% 0.3% 0.7%
Like-for-like revenue growth 8.7% (3.7)% 6.6%
Quarterly revenue analysis
Total revenue* Like-for-like revenue
2022 2021 2022 2021
Q1 17.9% 5.7% 15.3% 15.7%
Q2 9.2% 87.8% 8.5% 94.1%
H1 13.3% 37.5% 11.7% 47.3%
Merchanting Q3 11.5% 15.1% 8.7% 15.2%
Q4 4.7% 13.6% 2.3% 11.9%
H2 7.3% 14.4% 5.6% 13.7%
FY 10.3% 24.8% 8.7% 28.2%
Q1 (6.0)% 49.8% (11.9)% 42.1%
Q2 (3.2)% 29.0% (9.2)% 19.7%
H1 (4.6)% 38.7% (10.6)% 29.8%
Toolstation Q3 6.1% 9.1% 0.2% 1.4%
Q4 12.7% 1.7% 7.2% (5.1)%
H2 8.9% 5.3% 3.7% (2.0)%
FY 1.9% 20.2% (3.7)% 12.3%
Q1 13.6% 11.5% 10.5% 19.5%
Q2 7.1% 74.6% 5.6% 76.9%
H1 10.3% 37.7% 7.9% 44.1%
Total Group Q3 10.7% 14.1% 7.4% 13.1%
Q4 6.0% 11.4% 3.1% 8.8%
H2 7.5% 12.8% 5.3% 11.0%
FY 8.9% 24.0% 6.6% 25.4%
* Trading day adjusted
Operating profit
£m 2022 2021 Change
Merchanting 314 320 (1.9)%
Toolstation (9) 22 (140.9)%
Property 25 49 (49.0)%
Unallocated costs (35) (38) 7.9%
Adjusted operating profit 295 353 (16.4)%
Amortisation of acquired intangible assets (10) (11)
Adjusting items - 7
Operating profit 285 349
Adjusted operating in 2022 is stated after £15m of restructuring charges in the Merchanting segment.
There were no adjusting items in the year. During 2021, the Group successfully exited the leases on a
number of branches closed in 2020 for less than the contractual lease liability, which generated a net
credit to adjusting items of £7m.
Finance charge
Net finance charges, shown in note 10 were £40m (2021: £43m) with the reduction primarily due to
favourable foreign exchange movements.
Taxation
The tax charge for 2022 was £53m (2021: £65m excluding discontinued operations).
The tax charge for the year gives an effective tax rate (“ETR”) of 21.6% (standard rate 19%, 2021 actual
19.7%). The ETR rate is higher than the standard rate due to the effect of expenses not deductible for tax
purposes, the largest items being the depreciation of property and unutilised overseas losses.
Earnings per share
The Group reported a total profit after tax of £192m (2021: £241m, excluding discontinued operations)
resulting in basic earnings per share of 90.8 pence (2021: 103.9 pence, excluding discontinued
operations). Diluted earnings per share were 89.2 pence (2021: 102.6 pence excluding discontinued
operations).
Adjusted profit after tax was £200m (2021: £249m) resulting in adjusted earnings per share (note 20(b)) of
94.6 pence (2021: 107.3 pence). Diluted adjusted earnings per share were 92.9 pence (2021: 105.9 pence).
Cash flow and balance sheet
Free cash flow
£m 2022 2021 Change
Group adjusted operating profit excluding property profits 270 304 (34)
Depreciation of PPE and other non-cash movements 97 98 (1)
Change in working capital (76) (152) 76
Net interest paid (excluding lease interest) (17) (14) (3)
Interest on lease liabilities (21) (21) 0
Tax paid (58) (60) 2
Adjusted operating cash flow 195 155 40
Capital investments
Capex excluding freehold transactions (110) (95) (15)
Proceeds from disposals excluding freehold transactions 10 5 5
Free cash flow before freehold transactions 95 65 30
The Group delivered good free cash flow conversion of 67% in the year (2021: 51%). This included a working
capital increase of £76m which was largely driven by a decrease in trade creditors. Stock and debtors were
well controlled given the impact of high inflation with debtor days reducing by one day and stock volumes
reducing by a double-digit percentage, partly attributable to high levels held in prior year given supply
chain concerns but also reflective of tight stock management.
Capital investment
£m 2022 2021
Strategic 75 66
Maintenance 28 20
IT 7 9
Base capital expenditure 110 95
Freehold property 38 81
Gross capital expenditure 148 176
Disposals (23) (82)
Net capital expenditure 125 94
Base capital expenditure in cash terms was £15 higher than the prior year as the Group continued to invest
in the strategic properties set out in 2021. The total expenditure was below medium-term guidance (of
£125m p.a.) which reflects a more cautious approach during the second half with greater macroeconomic
uncertainty.
In line with the Group’s plan for growth, strategic capex was almost exclusively focused on Toolstation
(70 new branches and distribution centre investments in the UK and the Netherlands), Travis Perkins
General Merchant new branches and investment in the Group’s value-added services offerings, primarily
Benchmarx and Hire.
Maintenance capex increased by £8m but this was principally a result of 2021 being well below the long-run
average due to the redeployment of fleet assets from the 2020 restructuring programme in lieu of new
purchases.
With regards to freehold property activity, 2021 was an exceptional year as the cash generated from the
sale of properties vacated as part of the restructuring programme was recycled into new Merchant branches.
With property activity returning to more normal levels in the year, the Group continued with this
value-generative approach to managing its property portfolio, using proceeds generated to primarily
purchase the freeholds of several General Merchant branches in the South-East of England to protect these
key trading assets for the future.
Uses of free cash flow
2022 2021 Change
Free cash flow (£m) 95 65 30
Investments in freehold property (38) (81) 43
Disposal proceeds from freehold transactions 12 78 (66)
Acquisitions / disposals - 249 (249)
Dividends paid (82) (105) 23
Net purchase / sale of own shares (172) (70) (102)
Cash payments on adjusting items (7) (33) 26
Drawdown of borrowings 75 - 75
Repayment of bonds (120) - (120)
Other - (150) 150
Change in cash and cash equivalents (237) (47) (190)
Cash and cash equivalents reduced by £237m in the year which was predominantly a result of c. £170m of
share repurchases funded by the sale of the Group’s Plumbing & Heating business in 2021 (the proceeds from
which are reflected in the prior year disposals, net of the acquisition cost of Staircraft).
The remainder of the movement principally relates to £120m of bonds being repurchased early via a tender
offer as part of the Group's ongoing management of its debt maturity profile due to advantageous market
conditions. These bonds have been partly replaced by a £75m term loan with details of this facility
outlined below. The “Other” category in the prior year contains around £130m of cash used to capitalise
the Wickes business upon demerger.
Dividend payments returned to normal levels in the year. The prior year reflected a special dividend
following the sale of the Plumbing & Heating Business and only an interim payment following the temporary
suspension of the dividend during the worst of the pandemic in 2020.
Net debt and funding
31 Dec 2022 31 Dec 2021 Change Covenant
Net debt under IFRS 16 £819m £605m £(214)m
IFRS 16 net debt / adjusted EBITDA 1.8x 1.2x (0.6)x
Covenant metrics*
Covenant net debt £279m £87m £(192)m
Covenant net debt / EBITDA 0.8x 0.2x (0.6)x <3.0x
*All covenant metrics measured pre IFRS16
Covenant net debt increased by £192m across the year to £279m. As noted above, this movement is
principally a result of the 2021 closing position including c. £170m of net proceeds from the sale of the
Plumbing & Heating business which were returned to shareholders via the share buyback programme during
2022.
Funding
As at 31 December 2022, the Group’s committed funding of £905m comprised:
• £180m guaranteed notes due September 2023, listed on the London Stock Exchange
• £250m guaranteed notes due February 2026, listed on the London Stock Exchange
• £75m bilateral bank loan due August 2027
• A revolving credit facility of £400m, refinanced in January 2019, of which £54m matures in January
2024 and the remaining £346m matures in April 2025
As at 31 December 2022, the Group had undrawn committed facilities of £400m (2021: £400m) and deposited
cash of £194m (2021: £435m), giving overall liquidity headroom of £594m.
In April 2022, the Group completed a tender offer on the 2023 guaranteed notes, repurchasing £120m
principal amount of notes which were subsequently cancelled.
In August 2022, the Group entered into a £75m five-year bilateral loan with one of its relationship banks,
pari passu with existing facilities. The bilateral loan bears a floating interest rate, which was fixed at
the point of issuance via an interest rate swap.
The Group’s credit rating from Fitch Ratings was affirmed at BBB- with stable outlook following a review
in October 2022.
Principal risks and uncertainties
Risk management is integral to building the Group’s resilience and supporting delivery of its strategic
objectives, which will both protect and create stakeholder value. Heightened uncertainty in the external
environment, alongside the need to successfully implement a number of transformational programmes
internally, drive an increasingly dynamic risk landscape for the Group to navigate, underlining the
importance of maintaining effective and timely risk management processes.
The Group’s risks are regularly reviewed and reassessed through a process that considers both internal and
external factors. Based on the latest review, the Directors have made the following changes to the
principal risk set:
• The Pandemic risk has been removed from the principal risk set given the Group has developed proven
ways of working to continue to operate whilst promoting the safety and wellbeing of colleagues,
customers and suppliers. The Group remains vigilant in the ongoing assessment of, and response, to
public health concerns. The ongoing impact of the pandemic on global markets is considered within the
Macroeconomic Volatility risk.
• A Macroeconomic Volatility risk was introduced in 2021 in light of availability challenges and early
signs of inflation. Whilst the former has resolved in 2022, this risk has been reshaped to focus on
the uncertain and volatile macroeconomic and geopolitical environment, which the Group is not alone in
facing. The Directors consider this to present a high level of inherent risk to the Group with an
increasing risk trend, although action has been taken on many fronts during 2022 to manage and
mitigate the impacts.
Accordingly, the 2022 Annual Report and Accounts will report risks under the following captions: long term
market trends, macroeconomic volatility, supply chain resilience, managing change, climate change & carbon
reduction, cyber threat & data security, health, safety & wellbeing, legal compliance and critical asset
failure.
For the principal risks brought forward from 2021, the Directors consider the risk trend to be stabilising
in relation to critical asset failure and climate change & carbon reduction. All other risk trends are
unchanged.
Emerging risks, which are known risks that are currently difficult to fully assess and/or quantify, are
also regularly considered and monitored by the Directors. The potential for an escalation of conflict in
Europe in relation to the war in Ukraine continues to be monitored as an emerging risk, with the potential
to impact sourcing and supply. During 2022 the Board also considered potential emerging risks related to
international relations with China and renewed calls for a referendum on Scottish Independence.
Consolidated income statement
For the year ended 31 December 2022
Notes 2022 2021
Revenue 6 4,994.8 4,568.7
Adjusted operating profit 7(a) 295.3 352.8
Adjusting items 8 – 6.8
Amortisation of acquired intangible assets (10.5) (11.1)
Operating profit 7(a) 284.8 348.5
Interest on lease liabilities (21.5) (21.1)
Other finance costs 10 (27.5) (25.7)
Finance income 10 9.2 3.9
Profit before tax 7(b) 245.0 305.6
Adjusting items – deferred tax – (4.7)
Tax on adjusting items – (1.6)
Other tax (52.8) (58.5)
Total tax 11 (52.8) (64.8)
Profit from continuing operations 192.2 240.8
Profit from discontinued operations 12 – 38.1
Profit for the year 192.2 278.9
Total profit for the year as all is attributable to the owners of the Company.
Earnings per ordinary share
Adjusted basic earnings per share 15(b) 94.6p 107.3p
Basic
• from continuing operations 15(a) 90.8p 103.9p
• total 15(a) 90.8p 120.3p
Diluted
• from continuing operations 15(a) 89.2p 102.6p
• total 15(a) 89.2p 118.8p
Consolidated statement of comprehensive income
For the year ended 31 December 2022
£m Notes 2022 2021
Profit for the year 192.2 278.9
Items that will not be reclassified subsequently to profit and loss:
Actuarial (loss) / gain on defined benefit pension schemes 13 (145.3) 94.9
Income tax relating to other comprehensive income 36.3 (34.3)
Items that may be reclassified subsequently to profit and loss:
Foreign exchange differences on retranslation of foreign operations 5.5 2.9
Fair value gains on cash flow hedges 4.3 –
Deferred tax on cash flow hedges (1.1) –
Total other comprehensive (loss) / income for the year net of tax (100.3) 63.5
Total comprehensive income for the year 91.9 342.4
Total comprehensive income for the year attributable to the owners of the Company arises from:
Continuing operations 91.9 304.3
Discontinued operations – 38.1
91.9 342.4
All other comprehensive income is attributable to the owners of the Company.
Consolidated balance sheet
As at 31 December 2022
£m 2022 2021
Assets
Non-current assets
Goodwill 859.0 853.0
Other intangible assets 115.9 125.7
Property, plant and equipment 847.3 800.1
Right-of-use assets 451.7 439.8
Long term prepayments and other receivables 17.2 0.7
Deferred tax asset 15.0 13.9
Derivative financial instruments 4.3 –
Retirement benefit asset 135.9 275.8
Total non-current assets 2,446.3 2,509.0
Current assets
Inventories 727.8 724.4
Derivative financial instruments – 0.2
Trade and other receivables 725.9 706.7
Tax debtor 0.7 –
Cash and cash equivalents, excluding bank overdrafts 235.7 459.8
Total current assets 1,690.1 1,891.1
Total assets 4,136.4 4,400.1
Equity and liabilities
Capital and reserves
Issued share capital 23.8 25.2
Share premium account 545.6 545.6
Cash flow hedge reserve 4.3 –
Merger reserve 326.5 326.5
Revaluation reserve 12.1 10.5
Own shares (34.3) (61.4)
Foreign exchange reserve 9.6 4.1
Other reserves 1.4 –
Retained earnings 1,213.2 1,387.3
Total equity 2,102.2 2,237.8
Non-current liabilities
Interest-bearing loans and borrowings 349.1 575.2
Lease liabilities 438.3 414.7
Deferred tax liabilities 96.0 140.4
Long-term provisions 4.9 6.8
Total non-current liabilities 888.3 1,137.1
Current Liabilities
Interest-bearing loans and borrowings 192.5 –
Lease liabilities 74.3 74.5
Derivative financial instruments 0.2 –
Trade and other payables 852.4 921.1
Tax liabilities – 0.4
Short-term provisions 26.5 29.2
Total current liabilities 1,145.9 1,025.2
Total liabilities 2,034.2 2,162.3
Total equity and liabilities 4,136.4 4,400.1
Consolidated statement of changes in equity
For the year ended 31 December 2022
Cash Revaluation Own Own Foreign
£m Share Share flow Merger shares – shares exchange Other Retained Total
capital premium hedge reserve reserve treasury – ESOT reserve earnings equity
reserve
At 1 January 25.2 545.6 – 326.5 14.3 – (39.5) 1.2 – 1,840.5 2,713.8
2021
Profit for the – – – – – – – – – 278.9 278.9
year
Other
comprehensive
income for the – – – – – – – 2.9 – 60.6 63.5
year net of
tax
Total
comprehensive – – – – – – – 2.9 – 339.5 342.4
income for the
year
Demerger – – – – – – – – – (679.7) (679.7)
dividend
Other – – – – – – – – – (105.4) (105.4)
dividends
Adjustments in
respect of – – – – (1.1) – – – – 1.1 –
revalued fixed
assets
Shares
purchased in
share buyback – – – – – (53.8) – – – – (53.8)
and held as
treasury
shares
Shares
purchased in
share buyback – – – – – – (16.7) – – – (16.7)
and held as
own shares by
ESOT
Sale of own – – – – – – 17.4 – – – 17.4
shares
Own shares – – – – – – 31.2 – – (31.2) –
movement
Equity-settled
share-based – – – – – – – – – 23.2 23.2
payments
Tax on
equity-settled – – – – – – – – – (0.7) (0.7)
share-based
payments
Tax on
revalued – – – – (2.7) – – – – – (2.7)
assets
At 31 December 25.2 545.6 – 326.5 10.5 (53.8) (7.6) 4.1 – 1,387.3 2,237.8
2021
Cash Revaluation Own Own Foreign
£m Share Share flow Merger shares – shares exchange Other Retained Total
capital premium hedge reserve reserve treasury – ESOT reserve earnings equity
reserve
At 1 January 25.2 545.6 – 326.5 10.5 (53.8) (7.6) 4.1 – 1,387.3 2,237.8
2022
Profit for the – – – – – – – – – 192.2 192.2
year
Other
comprehensive
income for the – – 4.3 – – – – 5.5 – (110.1) (100.3)
year net of
tax
Total
comprehensive – – 4.3 – – – – 5.5 – 82.1 91.9
income for the
year
Other – – – – – – – – – (81.7) (81.7)
dividends
Adjustments in
respect of – – – – (1.1) – – – – 1.1 –
revalued fixed
assets
Shares
purchased in
share buyback – – – – – (125.5) – – – – (125.5)
and held as
treasury
shares
Shares
purchased in
share buyback – – – – – – (46.6) – – – (46.6)
and held as
own shares by
ESOT
Sale of own – – – – – – 3.8 – – – 3.8
shares
Own shares – – – – – – 16.1 – – (16.1) –
movement
Cancelled (1.4) – – – – 179.3 – – 1.4 (179.3) –
shares
Equity-settled
share-based – – – – – – – – – 17.0 17.0
payments, net
of tax
Tax on
Equity-settled – – – – – – – – – (2.3) (2.3)
share-based
payments
Tax on
revalued – – – – 2.7 – – – – 5.1 7.8
assets
At 31 December 23.8 545.6 4.3 326.5 12.1 – (34.3) 9.6 1.4 1,213.2 2,102.2
2022
Consolidated cash flow statement
For the year ended 31 December 2022
£m 2022 2021
Cash flows from operating activities
Operating profit 284.8 348.5
Adjustments for:
Depreciation of property, plant and equipment 73.6 69.2
Depreciation of right-of-use assets 79.0 80.0
Amortisation of other intangibles 10.5 9.7
Amortisation of acquisition-related intangibles 6.5 11.1
Share-based payments 17.0 19.1
Foreign exchange – (0.2)
Gain on disposal of property, plant and equipment (25.3) (48.9)
Purchase of tool hire assets (8.9) (11.2)
Increase in inventories (3.4) (204.5)
Increase in receivables (19.2) (171.5)
(Decrease) / increase in payables (53.9) 224.2
Payments in respect of adjusting items in excess of the income statement charge (7.2) (27.4)
Cash generated from operations 353.5 298.1
Interest paid and debt arrangement fees (18.3) (15.1)
Interest on lease liabilities (21.5) (21.1)
Income taxes paid (57.6) (59.9)
Net cash from continuing operating activities 256.1 202.0
Net cash from discontinued operating activities – 127.3
Net cash from operating activities 256.1 329.3
Cash flows from investing activities
Interest received 1.4 1.4
Proceeds on disposal of property, plant and equipment 22.5 82.2
Purchase/development of computer software (7.0) (2.2)
Purchases of freehold land and buildings (38.0) (80.9)
Purchases of other property, plant and equipment (94.1) (81.6)
Acquisition of subsidiary, net of cash acquired – (32.3)
Disposal of subsidiaries – 266.9
Cash flows from other investments – 2.6
Net cash inflow / (outflow) from continuing investing activities (115.2) 156.1
Net cash (outflow) / inflow from discontinued investing activities – (13.3)
Net cash inflow / (outflow) from investing activities (115.2) 142.8
Cash flows from financing activities
Bank facility fee – (0.5)
Shares purchased in share buyback (172.1) (70.5)
Sale of own shares 3.8 17.4
Repayment of lease liabilities (78.8) (75.5)
Payments to pension scheme (3.7) (3.6)
Dividends paid (81.7) (105.4)
Financing transactions with discontinued operations – (127.4)
Drawdown of borrowings 75.0 –
Repayment of bonds (120.0) –
Repayment of borrowings – (12)
Net cash used in continuing financing activities (377.5) (377.5)
Net cash used in discontinued financing activities – (140.4)
Net cash used in financing activities (377.5) (517.9)
Net decrease in cash and cash equivalents (236.6) (45.8)
Cash and cash equivalents at 1 January 459.8 505.6
Cash and cash equivalents at 31 December 223.2 459.8
Notes
1. The Group’s principal accounting policies are set out in the 2022 Annual Report & Accounts, which is
available from 28 February 2023 on the Company’s website www.travisperkinsplc.co.uk.
2. The Directors are recommending a final dividend of 26.5p in respect of the year ended 31 December 2022
(2021: 26.0p). The dividend will be paid on 18 May 2023 to shareholders on the register at the close
of business on 11 April 2023. The Company's shares will go ex-dividend on 6 April 2023. The Company
operates a Dividend Reinvestment Plan, elections for which must be received by the Company's registrar
by 5.30pm on 27 April 2023.
3. The financial information set out in this statement does not constitute the Company's statutory
accounts for the years ended 31 December 2022 or 31 December 2021, but is derived from those accounts.
Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will
be delivered in due course. The auditor has reported on those accounts: their reports were (i)
unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their reports and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006. The audit of the statutory accounts for the year ended 31
December 2022 is now complete. Whilst the financial information included in this announcement has been
computed in accordance with International Financial Reporting Standards (“IFRS”) this announcement
does not itself contain sufficient information to comply with IFRS.
4. This announcement was approved by the Board of Directors on 27 February 2023.
5. It is intended to post the Annual Report & Accounts to shareholders on 24 March 2023 and to hold the
Annual General Meeting on 4 May 2023. Copies of the annual report prepared in accordance with IFRS
will be available from the Company Secretary, Travis Perkins plc, Lodge Way House, Lodge Way,
Harlestone Road, Northampton, NN5 7UG from 22 March 2023 and it is available on the Group’s website at
1 www.travisperkinsplc.co.uk.
6. Revenue reconciliation and like-for like sales
£m Merchanting Toolstation Total
2021 revenue 3,826.1 760.6 4,586.7
Network change (9.2) (11.9) (21.1)
Trading days (32.0) (2.0) (34.0)
2021 like-for-like revenue 3,784.9 746.7 4,531.6
Like-for-like change 434.9 28.3 463.2
2022 revenue 4,219.8 775.0 4,994.8
Network change (107.0) (55.7) (162.7)
2022 like-for-like revenue 4,112.8 719.3 4,832.1
Like-for-like revenue % 8.7% (3.7)% 6.6%
Total revenue growth % 10.3% 1.9% 8.9%
Like-for-like sales are a measure of underlying sales performance for two successive periods. Branches and
stores contribute to like-for-like sales once they have been trading for more than 12 months. Revenue
included in like-for-like is for the equivalent times in both years being compared, including changes to
the number of trading days. When branches close, revenue is excluded from the prior year figures for the
months equivalent to the post-closure period in the current year.
7. Profit
a. Operating profit
£m 2022 2021
Revenue (note 6) 4,994.8 4,586.7
Cost of sales (3,610.1) (3,277.9)
Gross profit 1,384.7 1,308.8
Selling and distribution (816.4) (729.6)
Administrative expenses (324.5) (291.3)
Profit on disposal of properties 25.3 48.9
Other operating income 15.7 11.7
Operating profit 284.8 348.5
Adjusting items (note 8) – (6.8)
Amortisation of acquired intangible assets 10.5 11.1
Adjusted operating profit 295.3 352.8
Profit on disposal of properties (25.3) (48.9)
Adjusted operating profit before property disposals 270.0 303.9
b. Adjusted profit
£m 2022 2021
Profit before tax 245.0 305.6
Adjusting items (note 8) – (6.8)
Amortisation of acquired intangible assets 10.5 11.1
Adjusted profit before tax 255.5 309.9
Total tax (52.8) (64.8)
Tax on adjusting items – 1.6
Adjusting items - deferred tax – 4.7
Tax on amortisation of acquired intangible assets (2.6) (2.7)
Adjusted profit after tax 200.1 248.7
Adjusted profit excludes adjusting items and amortisation of acquired intangible assets.
8. Adjusting items
In 2021, the Group was able to exit the leases of a number of branches closed in 2020 for less than the
contractual lease liability, which generated a net credit of £6.8m.
The 2021 tax charge includes an adjusting charge of £14.3m arising from the increase in the rate of UK
corporation tax from 19% to 25% effective on 1 April 2023 and an adjusting credit of £9.6m arising from
the recognition of a deferred tax asset in respect of losses in the Toolstation Netherlands business).
9. Business segments
The operating segments are identified on the basis of internal reports about components of the Group that
are regularly reviewed by the Chief Operating Decision Maker (“CODM”), which is considered to be the
Board, to assess performance and allocate capital.
Segment result represents the result of each segment without allocation of certain central costs, finance
costs and tax. Adjusted segment result is the result of each segment before adjusting items and property
profits. Unallocated segment assets and liabilities comprise financial instruments, current and deferred
tax, cash, borrowings and pension scheme assets and liabilities.
Both operating segments sell building materials to a wide range of customers, none of which are dominant,
and operate almost exclusively in the United Kingdom.
The Wickes business was demerged on 27 April 2021 and the Plumbing & Heating business was sold on
30 September 2021 and are excluded from the 2021 comparatives.
2022
£m Merchanting Toolstation Unallocated Consolidated
Revenue 4,219.8 775.0 – 4,994.8
Operating profit 331.3 (11.8) (34.7) 284.8
Amortisation of acquired intangible assets 7.6 2.9 – 10.5
Adjusting items – – – –
Adjusted operating profit 338.9 (8.9) (34.7) 295.3
Less property profits (25.3) – – (25.3)
Adjusted operating profit excluding property profits 313.6 (8.9) (34.7) 270.0
Adjusted operating margin 8.0% (1.1%) – 5.9%
Adjusted operating margin excluding property profits 7.4% (1.1%) – 5.4%
Average capital employed 2,183.3 572.9 (83.4) 2,670.8
Segment assets 2,959.1 743.8 433.6 4,136.5
Segment liabilities (1,083.3) (309.4) (641.6) (2,034.3)
Consolidated net assets 1,875.8 434.47 (208.0) 2,102.2
Capital expenditure 91.6 49.9 – 141.5
Amortisation of acquired intangible assets 7.6 2.9 – 10.5
Depreciation and amortisation of software 65.6 14.6 – 80.2
9. Business segments continued
£m Merchanting Toolstation Unallocated Consolidated
Revenue 3,826.1 760.6 – 4,586.7
Operating profit 369.8 16.9 (38.2) 348.5
Amortisation of acquired intangible assets 6.1 5.0 – 11.1
Adjusting items (6.8) – – (6.8)
Adjusted operating profit 369.1 21.9 (38.2) 352.8
Less property profits (48.9) – – (48.9)
Adjusted operating profit excluding property profits 320.2 21.9 (38.2) 303.9
Adjusted operating margin 9.6% 2.9% – 7.7%
Adjusted operating margin excluding property profits 8.4% 2.9% – 6.6%
Average capital employed 2,055.8 486.4 (36.1) 2,506.1
Segment assets 2,933.2 694.2 772.7 4,400.1
Segment liabilities (1,121.5) (307.1) (733.7) (2,162.3)
Consolidated net assets 1,811.7 387.1 39.0 2,237.8
Capital expenditure 142.9 30.4 – 173.3
Amortisation of acquired intangible assets 6.1 5.0 – 11.1
Depreciation and amortisation of software 68.2 10.7 – 78.9
10. Net finance costs
£m 2022 2021
Interest on bank loans and overdrafts (0.8) (0.6)
Interest on bonds (21.5) (20.0)
Interest on loan and interest rate swap (1.3) –
Amortisation of issue costs of bank loans (1.5) (1.2)
Unwinding of discounts – property provisions (0.4) (0.1)
Pension scheme SPV interest (1.7) (2.0)
Net loss on remeasurement of foreign exchange – (1.3)
Net loss on remeasurement of derivatives at fair value (0.3) (0.5)
Finance costs before lease interest (27.5) (25.7)
Interest on lease liabilities (21.5) (21.1)
Finance costs (49.0) (46.8)
Net gain on remeasurement of foreign exchange 2.1 –
Other finance income – pension scheme 5.3 2.4
Interest receivable 1.8 1.5
Finance income 9.2 3.9
Net finance costs (39.8) (42.9)
11. Tax
£m 2022 2021
Current tax:
Current year 56.2 62.1
Prior year 1.4 0.6
Total current tax 57.6 62.7
Deferred tax:
Current year (2.5) 1.9
Prior year (2.3) 0.2
Total deferred tax (4.8) 2.1
Total tax charge 52.8 64.8
12. Discontinued operations
During the year ended 31 December 2021, the Group completed the demerger of the Wickes business and the
disposal of the Plumbing & Heating business. The Wickes business was demerged on 27 April 2021 and the
Group recognised the distribution at a fair value of £679.7m. The difference between the fair value of the
Wickes business and the carrying amount of the assets distributed has been recognised as an expense of
£69.4m.
The Plumbing & Heating business was sold to H.I.G. Capital on 30 September 2021 for cash consideration of
£303.4m. Total net assets sold were £210.4m and transaction costs were £12.0m, generating a profit on
disposal of £81.0m. The Company received cash of £28.7m in 2021 from the Plumbing & Heating business
before the completion of the sale.
Results of discontinued operations
£m 2021
Revenue 1,469.2
Operating profit 56.0
Net finance costs - interest on lease liabilities (18.4)
Profit before tax 37.6
Tax (11.1)
Profit for the period of discontinued operations 26.5
Pre-tax profit on disposal of P&H and loss after tax recognised on the remeasurement of 11.6
assets held for distribution for Wickes
Profit for the period from discontinued operations 38.1
13. Pension schemes
£m 2022 2021
At 1 January actuarial asset 275.8 178.4
Amounts recognised in income:
Current service costs and administration expenses (1.7) (1.9)
Interest income 5.3 2.5
Other movements:
Contributions from sponsoring companies 1.5 1.9
Foreign exchange 0.3 –
Amounts recognised in other comprehensive income:
Return on plan assets (excluding amounts included in net interest) (628.6) (2.2)
Actuarial (loss)/gain arising from changes in demographic assumptions 7.5 (15.5)
Actuarial gain arising from changes in financial assumptions 550.6 93.5
Actuarial gain arising from experience adjustments (74.8) 19.1
Gross pension asset at 31 December 135.9 275.8
Deferred tax liability (33.9) (68.8)
Net pension asset at 31 December 102.0 207.0
14. Dividends
Amounts were recognised in the financial statements as distributions to equity shareholders as follows:
£m 2022 2021
Final dividend for 2021 of 26.0 pence (2020: no final dividend) per ordinary share 55.5 –
Interim dividend for 2022 of 12.5 pence (2021: 12.0 pence) per ordinary share 26.2 26.9
Special dividend of nil pence (2021: 35.0 pence) per ordinary share – 78.5
Total dividend recognised during the year 81.7 105.4
The Directors are recommending a final dividend of 26.5p in respect of the year ended 31 December 2022.
The anticipated cash payment in respect of the proposed final dividend is £56.3m.
Share buyback
The Group concluded its buyback programme in May 2022 as announced in 2021 following the disposal of the
Plumbing and Heating business.
A total of 12.3m shares were purchased in 2022 (2021: 4.6m), of which none were held as treasury shares
(2021: 3.5m) and 3.3m were transferred to the Employee Share Ownership Trust (2021: 1.1m). The shares were
acquired at an average price of £13.70 per share (2021: £15.19 per share), with prices ranging from £11.72
to £16.20 (2021: £14.58 to £15.76). The total cost of £172.1m, including £2.2m of after-tax transaction
costs (2021: £70.5m including £0.3m of after-tax transaction costs), was deducted from shareholder’s
equity.
15. Earnings per share
a. Basic and diluted earnings per share
£m 2022 2021
Profit attributable to the owners of the parent
• from continuing operations 192.2 240.8
• from discontinued operations – 38.1
Weighted average number of shares for the purposes of basic earnings per share 211,630,413 231,766,613
Dilutive effect of share options on potential ordinary shares 3,789,212 2,967,694
Weighted average number of ordinary shares for the purposes of diluted earnings 215,419,625 234,734,307
per share
Earnings per share
• from continuing operations 90.8p 103.9p
• from discontinued operations – 16.4
• total 90.8p 120.3p
Diluted earnings per share
• from continuing operations 89.2p 102.6p
• from discontinued operations – 16.2p
• total 89.2p 118.8p
528,262 share options (2021: 6,545 share options) had an exercise price in excess of the average market
value of the shares during the year. As a result, these share options were excluded from the calculation
of diluted earnings per share. Share options that would be anti-dilutive due to the Group generating a
loss have also been excluded from the calculation.
b. Adjusted earnings per share
Adjusted earnings per share is calculated by excluding the effect of adjusting items and amortisation of
acquired intangible assets from earnings.
£m 2022 2021
Earnings for the purposes of earnings per share 192.2 240.8
Adjusting items – (6.8)
Amortisation of acquired intangible assets 10.5 11.1
Tax on adjusting items – 1.6
Adjusting deferred tax – 4.7
Tax on amortisation of acquired intangible assets (2.6) (2.7)
Earnings for adjusted earnings per share 200.1 248.7
Adjusted earnings per share 94.6p 107.3p
Adjusted diluted earnings per share 92.9p 105.9p
16. Net debt
a. Covenant net debt
£m 2022 2021
Cash and cash equivalents, including bank overdraft 223.2 459.8
Current interest-bearing loans and borrowings (180.0) –
Non-current interest-bearing loans and borrowings (349.1) (575.2)
Non-current lease liabilities (438.3) (414.7)
Current lease liabilities (74.3) (74.5)
Net debt (818.5) (604.6)
Less: Liability to pension scheme 26.7 28.5
Less: Lease liabilities 512.6 489.2
Covenant net debt (279.2) (86.9)
b. Movement in net debt
£m Cash and cash Leases Term loan, revolving credit Sterling Liability to Total
equivalents facility and loan notes bonds pension scheme
At 1 January 2021 (505.6) 1,327.1 (2.0) 547.6 30.1 1,397.2
Additions to leases – 92.4 – – – 92.4
Disposals of leases – (13.6) – – – (13.6)
Debt taken on – – 12.0 – – 12.0
following acquisition
Cash flow 45.8 (96.7) (12.5) – (3.6) (67.0)
Finance charges – (841.1) – – – (841.1)
movement
Amortisation of swap – – 1.0 0.6 – 1.6
cancellation receipt
Discount unwind on
liability to pension – – – – 2.0 2.0
scheme
Discount unwind on – 21.1 – – – 21.1
lease liabilities
At 1 January 2022 (459.8) 489.2 (1.5) 548.2 28.5 604.6
Additions to leases – 114.7 – – – 114.7
Disposals of leases – (12.5) – – – (12.5)
Cash flow 236.6 (100.3) 75.0 (120.0) (3.7) 87.6
Finance charges – – (0.1) 0.7 – 0.6
movement
Amortisation of swap – – – 0.1 – 0.1
cancellation receipt
Discount unwind on
liability to pension – – – – 1.9 1.9
scheme
Discount unwind on – 21.5 – – – 21.5
lease liabilities
31 December 2022 (223.2) 512.6 73.4 428.9 26.7 818.5
17. Free cash flow
£m 2022 2021
Adjusted operating profit 295.3 352.8
Less: Profit on disposal of properties (25.3) (48.9)
Adjusted operating profit excluding property profit 270.0 303.9
Share-based payments 17.0 19.1
Other net interest paid (16.9) (13.7)
Interest on lease liabilities (21.5) (21.1)
Income tax paid (57.6) (59.9)
Movement on working capital (76.5) (151.8)
Depreciation of property, plant and equipment 73.6 69.2
Amortisation and impairment of internally-generated intangibles 6.5 9.7
Capital expenditure excluding freehold purchases (110.0) (95.0)
Disposal of plant and equipment 10.1 4.4
Free cash flow 94.7 64.8
18. Return on capital ratios
Group return on capital employed is calculated as follows:
£m 2022 2021
Operating profit 284.8 348.5
Amortisation of acquired intangible assets 10.5 11.1
Adjusting items – (6.8)
Adjusted operating profit 295.3 352.8
Opening net assets 2,237.8 2,713.8
Net pension surplus (207.0) (144.5)
Net debt 604.6 1,397.2
Less: net assets of discontinued operations – (747.7)
Less: net borrowings of discontinued operations – (842.1)
Opening capital employed 2,635.4 2,376.7
Closing net assets 2,102.2 2,237.8
Net pension surplus (102.0) (207.0)
Net debt 818.5 604.6
Closing capital employed 2,818.7 2,635.4
Average capital employed 2,727.1 2,506.1
18. Return on capital ratios continued
Group return on capital employed is calculated as follows:
£m 2022 2021
Adjusted operating profit 295.3 352.8
Average capital employed in continuing operations 2,727.1 2,506.1
Return on capital employed 10.8% 14.1%
19. Net debt to adjusted EBITDA
£m 2022 2021
Operating profit 284.8 348.5
Depreciation and amortisation 169.6 170.0
EBITDA 454.4 518.5
Adjusted operating items – (6.8)
Adjusted EBITDA 454.4 511.7
Net debt 818.5 604.6
Net debt to adjusted EBITDA 1.8x 1.2x
Covenant net debt 279.2 86.9
Covenant net debt to adjusted EBITDA 0.6x 0.2x
Memo: covenant net debt to pre-IFRS 16 adjusted EBITDA 0.8x 0.2x
══════════════════════════════════════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00BK9RKT01
Category Code: ACS
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 226131
EQS News ID: 1569819
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
2 fncls.ssp?fn=show_t_gif&application_id=1569819&application_name=news&site_id=refinitiv
References
Visible links
1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=b4854157332e0d2a914974516d4a6414&application_id=1569819&site_id=refinitiv&application_name=news
============Recent news on Travis Perkins
See all newsREG-Travis Perkins Travis Perkins: Director/PDMR Shareholding
AnnouncementREG-Travis Perkins Travis Perkins plc - first quarter trading update for the three months to 31 March 2024
AnnouncementREG-Travis Perkins Travis Perkins: Results of AGM
AnnouncementREG-Travis Perkins Travis Perkins: Director/PDMR Shareholding
AnnouncementREG-Travis Perkins CORRECTION Travis Perkins: Director/PDMR Shareholding
Announcement