REG-Travis Perkins Travis Perkins: Q3 trading update

Travis PerkinsAnnouncement

11/10/2023 07:15

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   Travis Perkins (TPK)
   Travis Perkins: Q3 trading update

   11-Oct-2023 / 07:00 GMT/BST

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                                11 October 2023

                                        

        Dissemination of a Regulatory Announcement that contains inside
           information according to REGULATION (EU) No 596/2014 (MAR)

    

      Travis Perkins plc Q3 2023 trading update for the three months to 30
                                 September 2023

                                        

    Challenging market conditions persist with significant commodity product
    deflation impacting on margins; full year adjusted operating profit now
                 expected to be in the range of £175m to £195m

    

   Business Performance

    

   The Group has continued to  experience challenging market conditions  with
   the pronounced slowdown  in new  build housing and  domestic RMI  activity
   persisting into the third quarter. As a result, Group revenue declined  by
   (1.8)% in the period with like-for-like sales also down (1.8)%.

    

   Whilst third  quarter  trading  started as  expected  in  the  Merchanting
   segment, September  saw a  notable deterioration  in market  activity  and
   sentiment. Q3 revenue was (3.4)% lower year-on-year, a modest  improvement
   on the first half, however the  drivers of revenue have shifted  markedly.
   Pricing declined by (3.1)%,  resulting primarily from strong  deflationary
   pressures on commodity products which have significantly impacted on gross
   profit and  margins,  including the  impact  of selling  through  existing
   stocks at lower market prices.

    

   All merchant businesses have been focused on driving volume by  delivering
   great service and competitive prices for customers. This has resulted in a
   positive response from customers and, as a consequence, volume performance
   improved to flat year-on-year in the quarter.

    

   Toolstation continues to see  good growth across both  the UK and  Europe,
   benefitting from network maturity. Toolstation UK delivered revenue growth
   of 7% in the third quarter whilst Toolstation Europe saw revenue growth of
   9%.

    

   Whilst overhead inflation remains elevated,  the Group remains focused  on
   actions to  minimise  the impact  on  profitability. Working  capital  and
   capital expenditure continue to  be tightly managed  to reflect near  term
   market conditions.

    

    

    

    

    

    

   Outlook

    

   The Group’s businesses will continue to focus on meeting customers'  needs
   on pricing  and  service  in  order to  be  well  positioned  when  market
   conditions improve. With commodity deflation expected to continue and  the
   exit rate from the third quarter indicating further challenging conditions
   for the balance of the year, the Group now expects to deliver an  adjusted
   operating profit in the range of £175m to £195m for the full year.

    

   Nick Roberts, Chief Executive, commented:

   “Market conditions remain challenging  with continued weakness across  new
   build housing and domestic RMI.  Deflation on commodity products has  also
   been greater than we  had anticipated. In  this environment, our  priority
   has been to ensure that we deliver for our customers, both on service  and
   pricing, as we seek to retain and grow our customer base for the medium to
   long term.

    

   This is  the  right approach,  demonstrated  by our  ability  to  maintain
   volumes in  this  difficult market.  However,  this has  impacted  on  our
   trading margins and is reflected in today’s revised guidance.

    

   With a strong balance sheet  and leading customer propositions, we  remain
   confident in our future prospects and work continues to position the Group
   to benefit from the long-term  structural drivers across our end  markets,
   particularly with the  need to  decarbonise the built  environment and  to
   build more homes in the UK becoming ever more pressing.”

    

    

   Q3 2023                      Merchanting Toolstation Group
   Volume                         (0.3)%       2.5%      0.0%
   Price and mix                  (3.1)%       4.8%     (1.8)%
   Total revenue growth*          (3.4)%       7.3%     (1.8)%
                                                           
   Like-for-like revenue growth   (2.9)%       4.4%     (1.8)%

    

   YTD 2023                     Merchanting Toolstation Group
   Volume*                        (6.4)%       2.6%     (5.3)%
   Price and mix                   2.4%        6.0%      3.1%
   Total revenue growth*          (4.0)%       8.6%     (2.2)%
                                                           
   Like-for-like revenue growth   (4.1)%       5.0%     (2.7)%

    

   * Trading day adjusted

    

    

   Travis Perkins Management  team will be  hosting a call  for analysts  and
   investors at 8.00am BST. Details of  the call are below with  participants
   requested to join 10 minutes before the scheduled start time;

    

   Guest dial in: +44 (0) 33 0551 0200

   Please quote “Travis Perkins” when prompted by the operator

    

   The person  responsible for  making this  announcement is  Alan  Williams,
   Chief Financial Officer.

   Enquiries:

   Travis Perkins                        FGS Global
   Matt Worster                          Faeth Birch / Jenny Davey / James
                                         Gray
   +44 (0) 7990 088548                   +44 (0) 207 251 3801
    1 matt.worster@travisperkins.co.uk   TravisPerkins@fgsglobal.com

    

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:           GB00BK9RKT01
   Category Code:  MSCH
   TIDM:           TPK
   LEI Code:       2138001I27OUBAF22K83
   OAM Categories: 2.2. Inside information
   Sequence No.:   277150
   EQS News ID:    1745833


    
   End of Announcement EQS News Service

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References

   Visible links
   1. mailto:matt.worster@travisperkins.co.uk


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