8th Sep 2020 09:21
(Alliance News) - Travis Perkins PLC on Tuesday kept its dividend payouts suspended, as the Northampton-based builders' merchant swung to an interim loss on falling revenue and Covid-19 disruption.
For the six months to the end of June, Travis Perkins reported a pretax loss of GBP126.5 million, swinging sharply from a profit of GBP15.8 million for the same period a year before, on revenue that fell by 20% to GBP2.78 billion from GBP3.48 billion. On a like-for-like basis, revenue declined by 19%.
The group's decline in sales was driven by the lockdown period in the UK implemented from late March as a result of the Covid-19 pandemic, as only the Toolstation business reported growth for the period.
Revenue in the Merchanting unit, which is Travis Perkins' largest contributor to revenue, declined by 26% to GBP1.39 billion, as only a third of branches were open during the end of March and April, and those with a focus on essential products only.
Merchanting volumes fell by 80% year-on-year.
However, since April there have been signs of recovery, Travis Perkins said, with branches progressively reopening to support steady recovery in construction end-markets.
The Toolstation division recorded revenue growth of 37% year-on-year to GBP285 million, as its UK business adapted to the lockdown conditions and its branches reopening as click & collect fulfilment centres, with 90% of transactions being carried out through the websites.
In addition, although the lockdowns in continental Europe affected Toolstation's businesses there earlier than in the UK, this also meant an earlier reopening, with strong growth in the Netherlands, Belgium and France.
Looking ahead, Travis Perkins said the long term fundamentals of its end markets remain robust, with ongoing demand for new housing and underinvestment in the repair, maintenance and improvement of the existing UK housing stock; however uncertainties remain within the near-term UK economy.
Like-for-like sales trends in July and August have come very close to prior year levels, supported by the UK renovation, maintenance and improvement market and strong trading in consumer do-it-yourself markets.
Travis Perkins has kept its dividend payouts suspended, due to the continued economic and market uncertainty in the short term.
"Although our financial performance in the first half of 2020 was impacted by the Covid-19 pandemic, and we have had to undertake a restructuring programme in light of the challenging outlook for the group's end markets, we have made significant strategic and operational progress against the four strategic priorities we outlined at our full year results in March 2020," said Chief Executive Officer Nick Roberts.
Shares in Travis Perkins were down 8.5% at 1,116.50 pence on Tuesday in London.
By Dayo Laniyan; [email protected]
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