20th Mar 2020 09:08
(Alliance News) - Travis Perkins PLC on Friday said it will suspend paying its final dividend for 2019 and pause the demerger of Wickes home improvement retailing business due to the the "rapidly evolving situation" and the UK government's response to the Covid-19 pandemic.
Shares in the company were trading 12% higher at 780.00 pence each in London.
The builders' merchant said it hasn't yet seen any impact on trading from the virus outbreak but anticipates the trading environment will change quickly and materially in the coming weeks. The company's total group sales have grown 2.4% in the year-to-date.
The FTSE 250-listed company said plans are in place to protect profitability and preserve cash should the business experience a reduction in sales volume, either from enforced store closures or a wider reduction in economic and market activity.
Travis had planned to pay a 33.0 pence per share final dividend.
Actions include reducing operating costs, assessment of all capital expenditure requirements and careful management of inventory and other working capital. The company also plans to make use of tax relief and other UK government measures as they become available.
On Wickes demerger, Travis Perkins said it decided to halt the process to focus on managing the business through current challenges
"Whilst it is impossible to know exactly when it will be appropriate to re-start the demerger process, the intent to demerge remains unchanged, and we believe that we are in an advanced state of preparedness and would hope to be able to move forward swiftly when it is appropriate to do so," the company added.
The Northampton, England-based company has decided to withdraw all market guidance due to the "current level of uncertainty". It hopes to provide further updates when there is greater clarity on the impact of Covid-19 on the trading environment.
Travis Perkins Chief Executive Nick Roberts said: "Whilst there is unprecedented uncertainty on how the virus outbreak will directly impact our markets and our businesses, we enter this period from a position of strength and security, with a strong balance sheet and access to significant committed liquidity."
By Tapan Panchal; [email protected]
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