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Travis Perkins (TPK)
Travis Perkins: Publication of 2018 Annual Report
26-Feb-2019 / 16:13 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Publication of the Annual Report 2018
Further to the release of its results announcement this morning, Travis Perkins plc
(the "Company") announces that it has today published its Annual Report for the
year ended 31 December 2018. The Company's Annual Report 2018 can be viewed on the
Company's website - www.travisperkinsplc.co.uk [1]
In accordance with rule 9.6.1 of the Listing Rules, copies of the following
documents have been submitted to the National Storage Mechanism and will shortly be
available for inspection at www.morningstar.co.uk/uk/NSM [2]
- Annual Report and Accounts 2018;
A condensed set of the Company's financial statements and information on important
events that have occurred during the year and their impact on the financial
statements were included in the Company's announcement. That information together
with the information set out below which is extracted from the Annual Report
constitute the requirements of Disclosure and Transparency Rule ("DTR") 6.3.5 which
is to be communicated via a Regulatory Information Service in unedited full text.
This announcement is not a substitute for reading the full Annual Report. Page and
note references in the text below refer to page numbers in the Annual Report. To
view the preliminary announcement, visit the Company's website:
www.travisperkinsplc.co.uk [1]
Enquiries:
Graeme Barnes
Graeme.barnes@travisperkins.co.uk
+44 (0) 7469 401819
Helen O'Keefe
Helen.okeefe@travisperkins.co.uk
+44 (0) 1604 685910
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
For the year ended 31 December 2018
The Group operates in markets and an industry which by their nature are subject to
a number of inherent risks. The Group is able to mitigate those risks by adopting
different strategies and by maintaining a strong system of internal control.
However, regardless of the approach that is taken, the Group must accept a certain
level of risk in order to generate suitable returns for shareholders and for that
reason the risk management process is closely aligned to the Group's strategy.
The Board has a risk reporting framework that ensures it has visibility of the
Group's key risks, the potential impacts on the Group and how and to what extent
those risks are mitigated. The Board has assessed its risk appetite, which is set
to balance opportunities for growth and business development in areas of
potentially higher risk and return, whilst maintaining its reputation, legal and
regulatory compliance and high levels of customer service and satisfaction. As part
of its risk management process, the principal risks stated in the Group's risk
register are reviewed, challenged and updated by the Board and monitored throughout
the year. Each operating business within the Group monitors a separate risk
register. These risk registers are used to determine strategies adopted by the
Group's various businesses to mitigate the identified risks and are embedded in
their operating plans.
Details of the Group's risk management processes are given in the Corporate
Governance report on page 59.
In common with most large organisations, the Group is subject to general commercial
risks: for example, political and economic developments, changes in the cost of
goods for resale, increased competition in its markets and the threat of emerging
and disruptive competitors, material failures in the supply chain, failure to
secure supply of goods for resale on competitive terms, cyber-security breaches and
failure of our IT infrastructure.
The risk environment in which the Group operates does not remain static. During the
year, the Directors have reviewed the Group's principal risks and have concluded
that as the nature of the business and the environment in which it operates remain
broadly the same, the principal risks it faces are largely unchanged. However,
following the announcement in December 2018 that the Group strategy is being
refined to achieve greater simplification and focus on serving trade customers
through advantaged businesses, activities are underway to reshape the portfolio
with the proposed divestment of the Plumbing & Heating businesses. As a result, the
Directors have concluded that acquisition and disposal activity, previously
combined with risks associated with business transformation projects, is a key area
of focus and heightened risk for the Group and it is now described separately. The
Directors have also extended the description of health and safety risk to consider
in more detail the transport related risk faced by the Group, due to the scale of
the fleet it operates and the associated regulatory and compliance requirements.
Finally, the reduction in the deficit for the Group's two main defined benefit
schemes, supported by the closure of the schemes to future accrual in 2018 and a
continued focus on liability management, means that the Board no longer believes
that this area represents a principal risk.
The nature of risk is that its scope and potential impact will change over time. As
such the list below should not be regarded as a comprehensive statement of all
potential risks and uncertainties that may manifest in the future. Additional risks
and uncertainties that are not presently known to the Directors or which are
currently deemed immaterial could also have an adverse effect on the Group's future
operating results, financial condition or prospects.
The table on pages 36 to 41 sets out, in no particular order, the current principal
risks that the Board considers to be material, their potential impacts, the factors
that mitigate them and those areas of the businesses' strategies they potentially
impact. The inherent risk (before the operation of control) is stated for each risk
area together with an indication of the current trend for that risk.
CHANGING CUSTOMER AND
COMPETITOR LANDSCAPE
INHERENT RISK RISK MITIGATION
RISK: HIGH DESCRIPTION
Changes to market practice are
The Group tracked on an ongoing basis and
sells and reported to the Board.
distributes
building
TREND: STATIC materials
through a The Group continues to build
number of multi-channel capabilities that
channels. The complement its existing operations
number of and provide its customers with the
outlets and opportunity to transact with the
channels where Group through channels that best
building suit their needs.
STRATEGY: materials can
be purchased
continues to
grow with new The Group's strategy allows it to
Best-in-class competitors use sites flexibly. Alternative
service entering the space utilisation models are
market. These possible, including maintaining
new entrants smaller stores and implanting
may operate additional services into existing
Focus on business branches.
trade models which
differ
significantly
from the The development of new, innovative
Advantaged traditional and competitive supply solutions is
businesses merchanting, a key strength of the Group. It
retail and works closely with customers and
online formats suppliers on a programme of
from which the continuous improvement designed to
Group operates improve its customer proposition.
and may take
market share.
IMPACT: Pricing strategies across the Group
are regularly reviewed and where
At the same necessary refined to ensure they
time, customer remain competitive.
Adverse purchasing
effect habits
continue to
evolve with
increasing
on financial online
results transactions.
Customers'
preference for
purchasing
Loss of materials
market share through a
range of
supply
channels and
not just
through the
Group's
traditional
competitors
may affect the
Group's
performance
and adversely
impact the
profitability
of
branch-based
operations.
Increasing
price
transparency
could lead to
a perception
that the Group
is less price
competitive
leading to
downward
pressure on
price and
margins.
COLLEAGUE RECRUITMENT, RETENTION AND
SUCCESSION PLANS DO NOT DELIVER THE
REQUIRED SKILLS AND EXPERIENCE
INHERENT RISK RISK MITIGATION
RISK: MEDIUM DESCRIPTION
The Group's employment policies and
The ability to practices are kept under regular
recruit, review.
develop,
retain and
TREND: STATIC motivate
suitably Staff engagement and turnover by job
qualified type is reported regularly to the
staff is an Executive Committee and to the
important Board. Succession plans are
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February 26, 2019 11:14 ET (16:14 GMT)
