Travis Perkins: Third quarter 2018 trading update - 'Solid trading performance in line with market expectations'

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Travis Perkins (TPK) 
Travis Perkins: Third quarter 2018 trading update - 'Solid trading 
performance in line with market expectations' 
 
23-Oct-2018 / 08:00 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
23 October 2018 
 
Travis Perkins plc 
 
Third quarter 2018 trading update - "Solid trading performance in line with 
market expectations" 
 
Highlights 
 
  · Q3 Group total sales growth of 3.9% and like-for-like sales growth of 
  4.1% 
 
  · Combined Merchant businesses (including the General Merchanting, 
  Contracts and Plumbing & Heating divisions) achieved like-for-like growth 
  of 7.0% 
 
  · Challenging UK DIY market environment continues for the Wickes business, 
  although pricing pressure has begun to moderate 
 
  · Good progress on cost reduction activities, anticipate full-year 
  performance in line with market expectations 
 
            John Carter, Chief Executive, commented: 
 
           "The Group delivered a solid Q3 trading performance, in line with 
      expectations. Our trade-focused businesses delivered good sales growth 
against a challenging market backdrop, including successful recovery of cost 
     price inflation. The UK DIY market continues to be very challenging for 
    Wickes, where significant price pressure and weak consumer confidence is 
            providing a tough trading backdrop. 
 
       Across the Group, we are making good progress with the cost reduction 
  activities that were highlighted in July, and these actions are generating 
 positive results and underpin our confidence that our full-year performance 
            is on track and in line with market expectations( 1)." 
 
Q3 2018 sales  General  Plumbing Contracts(2) Consumer(3) Group 
growth         Merchant    & 
                ing(2)  Heating( 
                           2) 
Like-for-like    1.3%    14.8%       8.9%       (4.2)%     4.1% 
sales 
Net new space   (0.4)%   (4.4)%      0.3%        2.4%     (0.2)% 
and 
acquisitions 
Total sales      0.9%    10.4%       9.2%       (1.8)%     3.9% 
Two-year         3.7%    21.0%      17.3%       (1.9)%     8.4% 
like-for-like 
 
YTD 2018 sales General  Plumbing  Contracts(2) Consumer(3) Group 
growth         Merchant     & 
                ing(2)  Heating(2 
                            ) 
Like-for-like    0.9%     18.2%       6.4%       (4.2)%    4.2% 
sales 
Net new space    0.1%    (4.5)%       0.9%        2.3%     0.1% 
and 
acquisitions 
Total sales      1.0%     13.7%       7.3%       (1.9)%    4.3% 
 
     Total Group sales grew by 3.9% in the third quarter, with like-for-like 
  sales growth of 4.1%, in line with the first half of the year. Sales price 
    inflation reduced modestly in Q3 to 1.9% and was primarily driven by the 
   successful pass through of commodity-price inflation in the trade-focused 
    businesses, partially offset by Wickes, which as previously highlighted, 
 experienced significant pricing pressure in the UK DIY market. The combined 
         Merchanting businesses (General Merchanting, Plumbing & Heating and 
            Contracts) achieved like-for-like growth of 7.0% (7.1% YTD). 
 
      The like-for-like growth rate in General Merchanting softened modestly 
        compared to the second quarter of 2018 as the business cycles strong 
    comparative growth rates from Q3 2017. The two-year like-for-like growth 
       rate increased to 3.7% (Q2 2018: 3.3%). Cost reduction initiatives to 
       streamline above-branch costs were completed as planned by the end of 
   September, with actions to reduce waste and improve efficiency within the 
            business continuing throughout the remainder of the year. 
 
        The Plumbing & Heating division maintained its positive sales growth 
  momentum from the first half of 2018, continuing its outperformance of the 
market. Sales growth was strong across the division, including the wholesale 
business, branch network and specialist online channels, primarily driven by 
    enhancements to customer propositions. The rate of growth is expected to 
       moderate through Q4 as the division annualises the strong performance 
            improvement achieved in Q4 2017. 
 
    In the Contracts division, all three businesses continued to demonstrate 
            good growth and are outperforming their markets. The impact of 
    commodity-price inflation moderated in Q3, with sales price inflation of 
            3.8%, down from 6.0% in the first half of 2018. 
 
      Toolstation continued its strong like-for-like and total sales growth, 
        underpinned by successful range extensions helping to increase sales 
     density, and the continued expansion of the store network. We remain on 
            track to open 40 stores in 2018. 
 
The market environment in UK DIY remains challenging, resulting in continued 
  volume declines in Wickes in both core DIY and Kitchen & Bathroom showroom 
 categories. Significant pricing competition across the sector has prevented 
  the recovery of cost price inflation, albeit pricing pressure has begun to 
 moderate in recent weeks, and K&B order activity has shown some early signs 
     of recovery. Cost reduction activities are progressing as planned, with 
            reduced distribution costs and tight control of overhead costs. 
 
    Lead indicators such as secondary housing transactions, house prices and 
consumer confidence continue to paint a mixed picture, and as such the Group 
remains cautious on the near-term market outlook. In light of this the Group 
continues to focus on managing its underlying cost base, which underpins the 
 Group's confidence that full-year performance is on track, and in line with 
            market expectations(1). 
 
Enquiries 
 
Investor / analyst enquiries 
 
Graeme Barnes | [phone] | [e-mail] 
 
Zak Newmark | [phone] | [e-mail] 
 
Media enquiries 
 
David Allchurch / Toby Bates | Tulchan Communications | [phone] 
 
 The Travis Perkins Management Team will be hosting a Capital Markets Day on 
            04 December 2018. 
 
            Footnotes 
 
1) Company compiled market consensus for FY 2018 Group EBITA, as of 22 
October 2018, of GBP363m (range of GBP356m to GBP368m). 
 
2) Like-for-like sales growth for the three month period ended 30 
September 2018 compared to the three month period ended 30 September 2017. 
Total sales growth for the three month period ended 30 September 2018 
compared to the three month period ended 30 September 2017. 
 
3) Wickes like-for-like growth for the 13 week period ended 29 September 
2018 compared to the 13 week period ended 30 September 2017. Wickes total 
sales growth for the 91 day period ended 29 September 2018 compared to the 
91 day period ended 30 September 2017. 
 
ISIN:           GB0007739609 
Category Code:  QRT 
TIDM:           TPK 
LEI Code:       2138001I27OUBAF22K83 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   6287 
EQS News ID:    736339 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

October 23, 2018 02:05 ET (06:05 GMT)