Travis Perkins reports solid merchant sales but challenging consumer business at Wickes31 July 2018
Travis Perkins (TP) has reported good sales growth in its merchant trade business but challenging conditions in its Wickes consumer business.
The group reported solid overall revenue growth of 4.4% to £3.3bn with like-for-like growth of 4.2%. Adjusted operating profit before taxation was £167m, up 4.6%.
Adjusting items include an impairment of £246m against the goodwill in Wickes given the challenging DIY market, and reorganisation costs in the P&H and Wickes businesses.
“Our trade focused businesses in General Merchanting, Contracts, Toolstation and Plumbing & Heating achieved good sales growth despite experiencing a volatile first half,” said John Carter, group CEO.
“These businesses exited the period with encouraging momentum and, supported by a continued focus on cost, they remain on track to deliver modest profit growth for the full year.”
He said the consumer-focused business, Wickes, had a far more challenging period as weaker consumer spending trends, combined with a difficult competitive environment, held back profitability.
The Wickes team is executing a significant cost reduction programme. Good trading performance in the trade focused businesses in General Merchanting, Plumbing & Heating, Contracts and Toolstation.
Challenging UK DIY market negatively impacting sales and profitability in Wickes, with significant cost reduction plans underway.
An adjusted operating profits decline of 5.8% primarily reflects sales mix, with weaker kitchen and bathroom showroom sales in Wickes, and higher operating costs in general merchanting.