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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 | +44 7469 401819 | graeme.barnes@travisperkins.co.uk
Zak Newmark | +44 7384 432560 | zak.newmark@travisperkins.co.uk
Media enquiries
David Allchurch / Toby Bates | Tulchan Communications | +44 207 353 4200
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)
