26th Feb 2019 09:09
LONDON (Alliance News) - Builders' merchant Travis Perkins PLC on Tuesday said it swung to a loss in 2018 due to a sizeable impairment relating to its Wickes business, but added the proposed sale of the Plumbing & Heating division is making progress.
Shares in Travis Perkins were up 9.7% at 1,393.00 pence on Tuesday, the best performer in the FTSE 250 on Tuesday.
The company's pretax loss for 2018 was GBP49.4 million, swinging from a GBP289.7 million pretax profit in 2017.
This was a result of GBP386.7 million of adjusting items compared to only GBP40.9 million in 2017, the bulk of which consisted of a GBP246 million impairment of goodwill and intangible assets in its Wickes home improvement business.
However, adjusted profit before tax increased 1.2% to GBP347 million from GBP343 million in the prior year.
Wickes revenue fell 2.5% in 2018, with Travis Perkins describing the first half as "particularly difficult", hit by poor weather over the Easter period.
Revenue came to GBP6.74 billion, rising 4.8% from GBP6.43 billion the year before.
Travis Perkins's full year total dividend grew 2.2% to 47.0p per share from 46.0p per share.
Looking ahead, Travis Perkins is restructuring itself and removing the divisional structure of its Merchanting businesses in order to cut costs and streamline the segment. It is also intending to sell its Plumbing & Heating division.
"In the longer term, the group remains focused on generating sustainable profitable growth for shareholders and we will achieve this by allocating capital and resources to our most advantaged businesses. We are making good progress on the preparation for the disposal of the Plumbing & Heating division, and are seeing an encouraging improvement in trading and good momentum in Wickes," said Travis Perkins Chief Executive John Carter.
"Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term. The group remains focused on self-help actions to underpin performance in the near term, whilst continuing to invest for the future," Carter added.
In addition, as part of the simplification, Travis Perkins will remove the role of board-level chief operating officer. Tony Buffin, who has held the COO role since 2017, will depart.
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