TP announces intention to demerge Wickes23 August 2019
Travis Perkins (TP) has announced its intention to demerge Wickes as a separate business. The news was announced as the company released its financial results for the six months ended June 2019.
Its move came as it announced a strong turnaround in volume and profit performance at Wickes, with gains in both core DIY and through the kitchen & bathroom showroom. First half revenue for Wickes totaled £695m.
This follows a 2018 which saw the Travis Perkins Group recording a pretax loss of £49.4m, largely due to a £246m impairment of goodwill and intangible assets in the Wickes business. Wickes revenues declined by 2.5% in 2018.
The move to make Wickes a stand-alone business, rather than a division of TP, is expected in 2020 and follows TP’s decision to sell its Plumbing & Heating business.
In the group’s H1 results statement, continuing total group revenue increased by 6.9% and by 8% on a like-for-like basis, primarily driven by volume growth. Continuing group adjusted operating profit increased by 14.7% to £195m.
“I am delighted with the progress the Group has made in executing the strategy set out at the capital markets event in December 2018; to focus on our advantaged trade businesses and to simplify the Group,” said John Carter, chief executive officer.
“The Plumbing & Heating sales process is well under way, and we are announcing our intention to demerge Wickes as a separate business.
“This strategic progress has been underpinned by a strong trading period in the first half of 2019 albeit against softer trading conditions in H1 2018,” continued Mr Carter. “Our trade merchanting businesses have outperformed their markets, through continued focus on delivering excellent customer service, and benefitting from the leaner, lower cost organisation now in place.
“Whilst our underlying markets remain subdued, the self-help initiatives under way are supporting an encouraging improvement in performance and provide a strong platform to drive sustainable growth ahead of our markets in the medium term. Despite a cautious outlook for the near-term, the Group remains confident in making progress across the year as a whole.”