8th May 2019 09:23
LONDON (Alliance News) - Travis Perkins PLC said Wednesday it has made a strong start to 2019, with all businesses aside from Plumbing & Heating giving strong performances in the first quarter.
The UK builders' merchant and owner of home improvement retailer Wickes said that for the three months to the end of March, total sales grew by 5.4% on a year before, while like-for-like sales were up by 7.3%.
Segmentally, Merchanting saw total sales growth of 8.7% and a like-for-like sales increase of 11%, Sales growth was led by growth within larger regional and national customers, and also by growth in the Managed Services business. Total sales growth was less than like-for-like sales due to a reduction in selling space and fewer trading days, compared to a year before.
The Toolstation business's total sales grew by 25%, while like-for-like sales grew by 19%, as Travis Perkins continued to expand Toolstation's store network and online product ranges, which is helping to increase sales density.
The Retail division, which includes Wickes, saw total sales rise by 9.4% , with like-for-like sales up by 10%, due to strong performance from core DIY and Kitchens & Bathroom showroom ranges.
However, Plumbing & Heating saw a 8.2% decline in total sales for the quarter, and a like-for-like decline of 4.0%. Travis Perkins said this was because of a decline in the wholesale business, as well as milder weather conditions compared to the prior year.
Looking ahead, Travis Perkins said it expects the separation of the Plumbing & Heating business to be completed in the second quarter of 2019, and the group itself remains on target to achieve its planned cost reductions for the year.
"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," said Chief Executive John Carter.
"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," Carter added.
Travis Perkins said in December it has decided to focus on serving trade customers and will simplify the business to reduce complexity and cost to drive returns. The company said at the time it would explore the potential sale of its plumbing and heating division and target annualised cost savings of GBP20 million to GBP30 million over the next 18 months.
Nick Roberts replaces Carter on July 1. Roberts joins from Atkins, a unit of Canadian energy services group SNC-Lavalin Group Inc, where he has been chief executive officer since 2017. Atkins was formed after former London-listed engineering firm WS Atkins PLC was bought by SNC-Lavalin in July 2017.
Shares in Travis Perkins were up 2.6% at 1,440.50 pence on Wednesday.
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