REG-Travis Perkins Travis Perkins plc - Q1 2021 trading update

Travis PerkinsAnnouncement

15/04/2021 07:05

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   Travis Perkins (TPK)
   Travis Perkins plc - Q1 2021 trading update

   15-Apr-2021 / 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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   15 April 2021

    

                   Travis Perkins plc - Q1 2021 trading update

    Encouraging start to the year; Wickes demerger on track for completion on
                                   28th April

    

   Highlights

    

     • Positive  start  to  2021  driven  by  strong  RMI  demand  with  Group
       (excluding Wickes) like-for-like sales growth of 17.4% and 11.8% on a 2
       year like-for-like basis
     • Good like-for-like growth in  Merchanting and P&H,  up 15.5% and  11.4%
       respectively,  underpinned   by   sales   retention   from   the   2020
       restructuring programme
     • Continued acceleration of Toolstation  growth with like-for-like  sales
       up 42.0%
     • Ongoing strong performance in Wickes with like-for-like sales up 19.7%.
       Excellent growth  in  Core of  38.5%  partially offset  by  DIFM,  down
       (25.0)% on a like-for-like basis due to showroom closures
     • Wickes  demerger  due  to  complete  with  trading  in  Wickes   shares
       commencing on  28th April.  Travis Perkins  share consolidation  to  be
       effective following market close on  28th April, trading in new  Travis
       Perkins shares commencing on 29th April

   Nick Roberts, Chief Executive, commented:

   "The Group  has  enjoyed an  encouraging  start  to the  year  with  robust
   like-for-like sales  growth across  our businesses,  underpinned by  strong
   demand in  the RMI  market.  The Merchanting  business has  maintained  the
   momentum seen in the second half  of last year while Toolstation  continues
   to outperform, driven by its convenient and trade focused proposition.

    

   I am also  pleased to report  that the Wickes  demerger process remains  on
   schedule to  be completed  at the  end  of April,  leaving the  business  a
   simplified and trade focused group.

    

   We are encouraged  by the robustness  of the RMI  market and the  continued
   recovery in our other key end markets. However, at this early stage in  the
   year, our expectations remain unchanged as we continue to make progress  on
   the delivery of our longer-term strategic plans."

    

   Q1 2021 sales growth    Merchanting Toolstation Plumbing & Group (excluding
                                                    Heating       Wickes)
   Like-for-like sales        15.5%       42.0%      11.4%         17.4%
   growth
   Net space change          (8.4)%       8.9%       (5.0)%        (6.2)%
   Business disposals           -           -        (8.4)%        (3.0)%
   Trading days              (1.4)%      (1.1)%      (1.4)%        (1.4)%
   Total sales growth         5.7%        49.8%      (3.4)%         6.8%
   Two-year like-for-like     6.3%       66.8%*       9.1%         11.8%

   *Excludes Toolstation Europe

   Business performance

    

   Group, excluding Wickes

   The momentum in the Group's end  markets experienced in the second half  of
   2020 has  continued into  the current  year. Revenue  performance has  been
   boosted by  the  retention  of  sales from  the  branch  closure  programme
   conducted last summer  and the lapping  of a weaker  prior year  comparator
   which included the  start of  the first  national lockdown  in March  2020,
   leading to Group like-for-like sales growth of 17.4%.

   Throughout January and February  all businesses saw  a continuation of  the
   trends from the  last quarter  of 2020.  During March,  however, the  Group
   experienced a marked step up in activity with pent-up demand and  continued
   high levels of housing transactions fuelling higher RMI spend. In contrast,
   the new build housing  and commercial sectors  remain subdued although  the
   businesses with exposure to the "early  cycle" trades are seeing the  first
   signs of improvement.

   Like-for-like sales  in  the Merchanting  segment  were  up by  6.3%  on  a
   two-year basis,  supported  by the  retention  of sales  from  2020  branch
   closures. On a total sales basis, Merchanting sales were down (2.6)% vs  Q1
   2019 reflecting the overall reduced network capacity.

   Toolstation's impressive  like-for-like  growth continued,  driven  by  its
   digitally enabled and  convenient sales proposition.  The Group remains  on
   track to open 60 new branches in  the UK in 2021, with further  encouraging
   progress in expanding the European business.

   The Plumbing & Heating business continued the positive momentum seen in the
   second half  of  last year  with  two  year like-for-like  sales  up  9.1%.
   Similarly to  the  Merchanting  business,  P&H has  seen  strength  in  its
   smaller, RMI focused customer base  with the large contract segment  slower
   to recover.

   The Group is  experiencing an increasingly  inflationary environment,  over
   and above that seen in the second half of 2020, with prices on certain  raw
   material  categories,   such   as   timber,  copper   and   steel,   rising
   significantly.  At  this  stage,  however,  cost  price  inflation  remains
   manageable. Additionally, the Group has seen availability shortages on some
   lightside products  imported  from Asia,  as  well as  some  key  heavyside
   products moving onto allocation, albeit this has not had a material  impact
   on trading at this stage.

    

   Wickes (13 weeks to 27 March 2021)

    

   Like-for-like sales growth  19.7%
   Net space change             (0.8)%
   Total sales growth          18.9%
   Two-year like-for-like      25.6%

    

   Wickes like-for-like sales performance continued  to be strong at 19.7%  in
   Q1, 25.6% ahead on a two year basis. The excellent Core performance seen in
   the second  half  of 2020  has  continued into  the  current year  with  Q1
   like-for-like sales at 38.5%. This performance was delivered across a broad
   range of product categories  and was driven  by Wickes digital  capability,
   with continued  high  participation  of customer  delivery  and  click  and
   collect fulfilment.

    

   With DIFM showrooms remaining closed throughout the quarter, which included
   the key winter  sale period,  the recently developed  digital DIFM  journey
   enabled Wickes to maximise the opportunity available in the market. Q1 DIFM
   like-for-like sales declined by  (25.0)% on a  delivered basis, and  orders
   through the winter sale period were down by around (50)%.

    

   Performance of  Core through  the Easter  trading period  remained  strong,
   benefiting from  continued positive  engagement in  DIY and  buoyant  local
   trade, together with ongoing restrictions in the wider non-essential retail
   market, which eased on 12th April.

    

    

    

   Enquiries:

   Travis Perkins                          Powerscourt
   Matt Worster                            Justin Griffiths / James White
   +44 (0) 7990 088548                     +44 (0) 207 2501446
   matt.worster@travisperkins.co.uk        travisperkins@powerscourt-group.com
                                            
   Heinrich Richter                         
   +44 (0) 7392 125417                      
   heinrich.richter2@travisperkins.co.uk    

    

    

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   ISIN:           GB0007739609
   Category Code:  QRF
   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.:   99147
   EQS News ID:    1184918


    
   End of Announcement EQS News Service

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