11th Nov 2005 07:29
Travis Perkins PLC11 November 2005 11 November 2005 Travis Perkins plc Trading Update Travis Perkins is today providing an update on the group's trading: Whilst overall trading in the first four months of the second half-year has beenbroadly in line with expectations, market conditions and lead indicators haveworsened significantly from mid-October. Ten Months Two Months Four Months to October to August to October 2005 2005 2005 Interim AnnouncementLike-for-like turnover per trading day General Merchanting + 0.9% +0.1 - 0.4% Specialist Merchanting - 2.7% -0.5 - 0.9% Retailing - Core - 6.2% -7.4 - 9.0% - Showroom -13.8% -21.1% In retailing, competitors recently launched increased price led promotionalactivity aimed at recovering lost market share. Although much of the activityhas involved product categories not sold by Wickes, we have seen some impact onvolumes both from this and from a further deterioration in consumer confidence. We anticipate that this heightened level of price driven competition willcontinue into 2006 and will reverse some of the market share gains made up toAugust 2005. Wickes has deliberately not responded directly on price, butinstead targeted promotions and further cost reductions have enabled Wickes tomaintain its operating margins in this tougher environment. In merchanting our selective pricing tactics and our improved offer to our tradecustomers has continued to gain turnover and profit, with some evidence we aregaining market share overall. Despite this, we have seen a slow down in activityfrom mid-October, and our monthly customer confidence surveys have recorded amarked deterioration in anticipated workloads and order books. Accordingly, we expect trading conditions in merchanting to worsen more thanusual through the winter period, with the prospect of an extended shutdown inthe building sector over the holiday season. We continue to take action to mitigate the effects of this environment. Our like-for-like numbers employed continue to fall relative to 2004 andmerchanting productivity has continued to rise. With buying gains and synergiesfrom the Wickes transaction exceeding our original expectations, overall we donot expect adjusted PBT to be less than £205 million in the year to December 312005. As we indicated in the most recent interim results, we will need to see areduction in borrowing costs and in other pressures on disposable incomes beforewe can expect a strengthening of our markets next year. - ends - Enquiries: Geoff Cooper, Chief Executive +44 (0) 1604 683131Paul Hampden Smith, Finance Director +44 (0) 7712 878242Travis Perkins plc David Bick/Mike FelthamHolborn Public Relations +44 (0) 207 929 5599 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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