Weaker summer RMI demand dents TP Q3 sales22 October 2015
Weaker demand than expected in the RMI market during the summer has led Travis Perkins plc to revise its profit growth expectations for 2015.
“Whilst we planned for a modest reduction in RMI markets through the summer given the slowdown in secondary housing transactions towards the end of 2014 and early part of 2015, we saw weaker market demand than anticipated,” said John Carter, group chief executive.
“This was in both housing and non-housing RMI spend as evidenced by the recent construction output data, leading to dampened growth across all of our businesses.
“We indicated earlier in the year that we expected volumes to pick-up during the second half and October trading so far has seen a recovery in volumes.”
The general merchanting division, which includes the Travis Perkins builders’ merchant business, saw sales grow by 3.3% in Q3, 1.7% up on a like-for-like basis.
“Given the weaker than expected volume in the market, pricing also proved to be challenging,” the group said. “Trading performance has gathered momentum through October.”
Consumer sales grew by 4.9% in the third quarter, 2.3% on a like-for-like basis. The DIY market declined year-on-year in July and remained weak in August, though Wickes’ sales recovered in September and have improved further in the early part of October.
Group sales grew by 5.5% in Q3 (2.6% like-for-like). During Q3, new store and branch openings included 12 Toolstation stores, one Wickes store, two new Tile Giant stores, three Travis Perkins branches and nine Benchmarx showrooms.
During the quarter work, the Group's third heavyside Range Centre in Tilbury was completed, providing next day availability on 3,000 products and 48-hour availability on a further 3,000 products to more than 125 branches in London and the South East.
Looking ahead, the group said fourth quarter trading had started more encouragingly, with all businesses impacted by the weaker summer demand showing a pick-up in growth.
Additionally, lead indicators suggest a continued recovery in the fourth quarter with RMI markets growing further through the first half of 2016.