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Travis Perkins (TPK)
Travis Perkins: Q1 2019 trading update - positive start to 2019 despite
uncertain market conditions
08-May-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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08 May 2019
Travis Perkins plc
Q1 2019 trading update - positive start to 2019 despite uncertain market
conditions
Highlights
• Positive start to 2019 with Group like-for-like sales growth of 7.3%
and total sales growth of 5.4% against a soft prior year comparative
• Strong Merchanting like-for-like sales growth of 10.6%
• Continued acceleration of Toolstation growth, with 25% total sales
growth
• Good recovery in Wickes with 10.5% like-for-like sales growth
• Given current uncertain market conditions and the early stage of the
year, overall expectations for 2019 remain unchanged
John Carter, Chief Executive, commented:
"We have delivered strong sales growth in the first quarter of the year,
which reflects both our focus on excellent customer service and the weak
comparator in 2018. This performance is all the more encouraging given the
impact of the on-going political uncertainty on our end markets.
The Merchanting businesses have maintained the strong growth trend from
the end of 2018, and Toolstation continues to grow extremely well, driven
by network expansion and existing stores maturing. Wickes posted
encouraging sales growth figures in both core DIY and showroom categories,
demonstrating a strong turnaround in Kitchen and Bathroom performance. In
Plumbing & Heating the milder winter has impacted sales compared to 2018,
but our branches and specialist online channels have continued to perform
well. The work to operationally separate Plumbing and Heating is
progressing to plan and is expected to be completed in Q2.
The actions set out at our capital markets day in December 2018 to deliver
best in class service to trade customers and to simplify the Group are
well underway. We are making good progress on cost reduction activities
and expect to meet our cost reduction targets this year. Overall
expectations for the Group in 2019 remain unchanged."
Q1 2019 sales Merchanting(1) Toolstation(2) Retail(2) Plumbing & Group
growth Heating(1)
Like-for-like 10.6% 19.1% 10.0% (4.0)% 7.3%
sales
Net new space (1.0)% 5.9% (0.6)% (3.4)% (1.2)%
and acquisitions
Trading day (0.9)% - - (0.8)% (0.7)%
differences
Total sales 8.7% 25.0% 9.4% (8.2)% 5.4%
Q1 2018 (0.5)% 10.6% (7.9)% 19.7% 3.0%
like-for-like(3)
Two-year 10.0% 31.7% 1.3% 14.9% 10.5%
like-for-like
All businesses within Merchanting demonstrated good growth. Travis Perkins
generated like-for-like sales growth of 8%, continuing the improving trend
from the end of 2018 and primarily driven by sales growth with larger
regional and national customers, and through the Managed Services
business. The strategy to further empower branch managers is well
underway, with experienced managers being supplied with greater access to
information, the simplification of pricing systems and more customer
focused support from the central functions.
The specialist merchant businesses continue to drive strong like-for-like
sales growth, although the on-going political uncertainty poses a risk to
the outlook for the commercial construction and housebuilding markets.
Keyline continues to perform strongly through its targeted civils and
drainage product categories, particularly through direct-to-site
deliveries. CCF continues to win market share through market-leading
customer service and relationship management, although growth is likely to
moderate through the year, partly due to product availability constraints
in the supply chain. BSS has maintained the good sales growth momentum
from 2018, further leveraging its clear market-leading position. In trade
kitchens, Benchmarx sales are growing well, with one additional branch
opened in the quarter.
Toolstation continued its impressive like-for-like sales and total sales
growth, underpinned by the continued expansion of the store network,
alongside the launch of the new website at the end of 2018 and the
successful extension of online ranges which are helping to increase sales
density. We remain on track to open 60 new stores in the UK in 2019, with
encouraging progress in expanding the network in Europe.
Wickes had a strong performance in like-for-like sales and total sales
growth from both core DIY and the Kitchens and Bathroom showroom (K&B).
K&B benefited from a continued improvement in execution and a strong order
book carried over from 2018, partially aided by competitor decisions to
exit the design & install service for end-consumers in the second half of
2018. Improved core DIY sales benefited from strong execution, but this
was partially offset by the timing of Easter for Q1 (two days of Easter
sales in Q1 2018).
As expected, Plumbing & Heating experienced a slowdown in like-for-like
and total sales as the weather conditions were notably milder in Q1 2019
compared to 2018. Branch network and specialist online channels showed
good sales growth, which was offset by a decline in the wholesale
business.
The operational separation of the Plumbing & Heating business from the
Group is progressing to plan and is expected to be completed within the
second quarter. The Group remains on target to achieve its planned cost
reductions in 2019, with significant progress made towards removing the
divisional structure above the Merchanting businesses which will reduce
complexity, lower the above-branch cost base and speed up decision making.
Enquiries
Investor / analyst enquiries
Graeme Barnes | +44 7469 401 819 | 1 graeme.barnes@travisperkins.co.uk
Zak Newmark | +44 7384 432 560 | 2 zak.newmark@travisperkins.co.uk
Media enquiries
David Allchurch | Tulchan Communications | +44 207 353 4200
Footnotes
1. Like-for-like sales growth for the three month period ended 31 March
2019 compared to the three month period ended 31 March 2018 adjusted
for the impact of extra one-half trading day in the 2018 period. Total
sales growth for the three month period ended 31 March 2019 compared
to the three month period ended 31 March 2018 not adjusted for
the impact of extra one-half trading day in the 2018 period.
2. Wickes like-for-like and total sales growth for the 13 week period
ended 30 March 2019 compared to the 13 week period ended 31 March
2018.
3. Q1 2018 like-for-like figures restated for the new Group segmental
reporting structure, adopted from January 2019.
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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.: 8539
EQS News ID: 808315
End of Announcement EQS News Service
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References
Visible links
1. mailto:graeme.barnes@travisperkins.co.uk
2. mailto:zak.newmark@travisperkins.co.uk
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