4th Jul 2005 07:00
Travis Perkins PLC04 July 2005 4 July 2005 Travis Perkins PLC Interim pre-close Trading Statement Travis Perkins PLC, the leading UK builders' merchant and DIY retailer, todayissued the following trading statement for the first six months of 2005: Overall group turnover for the first six months, including the effect of theacquisition of Wickes, was up by 41%, with like-for-like ("LFL") turnover pertrading day (i.e. after adjusting for one extra trading day in 2004) lower by0.5%. Progress on combining the Travis Perkins and Wickes businesses is runningahead of expectations. In the Travis Perkins builders' merchant business (65% of total merchantingturnover) for the first six months of 2005, total turnover per trading day wasup by 6.2% with LFL turnover per trading day up by 1.6%. In this period, ourspecialist merchanting businesses (35% of total merchanting turnover),comprising Keyline, CCF and City Plumbing, saw total turnover per trading daylower by 1.3%, and LFL turnover per trading day lower by 4.1%, reflecting mainlyweaker showroom sales in City Plumbing. The sharp slowdown in consumer spending from February has had some impact onvolumes in the trade market, particularly in RMI, in the second quarter. Themore consumer-related RMI activity, especially in plumbing and heating, wasaffected, although our business in commercial sectors and sectors related togovernment spending remained robust. The group has taken further action in merchanting to boost productivity - up by2% in the first half - and gain market share, while protecting gross margins -slightly up in the first half. Buying benefits and other synergy gains from thework to integrate Wickes into the group are running ahead of the group'soriginal expectations despite lower base volumes. Synergy projects outside thebuying area are now being accelerated to produce further cost reductions. The group's earlier prediction for a gradual recovery in the DIY market has beenborne out by experience in the second quarter, although the improvement has beenpatchy and slower than anticipated. At Wickes, which was acquired by the group on 11 February 2005, total turnoverfor the 26 week period to 26 June 2005 was down by 1.7%, with LFL turnover downby 4.9%. LFL turnover of core products (84% of Wickes' sales) were down by 4.2%.The LFL performance, whilst showing monthly variations, continues to indicate animproved trend from the weakest position experienced, in February 2005, andlatest data available shows Wickes gaining market share from nationalcompetitors. The home delivered showroom market, which accounts for around 16%of Wickes' sales, continues to be soft as consumers rein back expenditure on 'larger ticket' items. Turnover in this category was off 8.4% on an LFL basis forthe 26 week period. Since the start of 2005, the group has added a net 34 new branches in additionto 172 acquired Wickes stores. The group now has 957 trading locations in theUK. While continuing to invest steadily in the growth of both the merchanting andretail businesses, group net borrowings are running slightly lower than plannedlevels due to tight control of working capital and capital expenditure. We expect the trading environment for the remainder of 2005 to continue to bechallenging. Whilst we have taken prompt action to reduce costs this will notfully offset the impact of the current trading environment, and our expectationshave been moderated accordingly. However, we expect to grow profits inmerchanting in 2005 as well as add profits and synergies from the acquisition ofWickes. Enquiries: Geoff Cooper, Chief ExecutivePaul Hampden Smith, Finance DirectorTravis Perkins PLC +44 (0) 1604 683131 David Bick/Trevor PhillipsHolborn Public Relations +44 (0) 207 929 5599 ends This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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