Travis Perkins: Full year results for the twelve months ended 31 December 2019; Positive trading performance against a challenging market backdrop

Travis Perkins (TPK) 
Travis Perkins: Full year results for the twelve months ended 31 December 2019; Positive trading performance 
against a challenging market backdrop 
 
03-March-2020 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
Travis Perkins plc 
 
Full year results for the twelve months ended 31 December 2019 
 
Positive trading performance against a challenging market backdrop 
 
GBPm               Note FY 2019     FY 2018    FY 2018   Change vs 
                              as reported IFRS 16(1) illustrativ 
                                                               e 
                                                     comparative 
                                                               s 
Revenue                 6,956       6,741      6,741        3.2% 
Like-for-like            3.8%        4.9%       4.9%    (1.1)ppt 
revenue 
growth(2) 
Adjusted           6a     442         375        410        7.8% 
operating 
profit(2) 
Adjusted          12b  112.7p      114.5p     106.0p        6.3% 
earnings per 
share(2) 
ROCE(2)            16   10.1%       10.5%       9.6%      0.5ppt 
Covenant net      15a     344                    300          44 
debt(2) 
Dividend per       13   48.5p                  47.0p        3.2% 
share 
Operating profit          232        (22) 
/ (loss) 
Total profit /            123        (84) 
(loss) after tax 
Basic earnings    12a   48.9p     (34.4)p 
per share 
 
(1) Figures adjusted on a non-statutory illustrative basis for IFRS 16 - Leases as previously reported in May 
2019 
 
(2) Alternative performance measures are used to provide a guide to underlying performance. Details of 
calculations can be found in the notes listed 
 
Financial highlights 
 
· Like-for-like revenue growth of 3.8% with total revenue growth of 3.2% 
 
· Good growth in the Merchant businesses despite challenging market conditions, continued excellent growth 
in Toolstation and a strong recovery in Wickes 
 
· Adjusted operating profit growth of 7.8% driven by Wickes recovery, the transformation programme in P&H 
and the positive impact of cost reduction activities 
 
· Net adjusting items of GBP187m including a GBP108m impairment relating to halting of the ERP replacement 
programme 
 
· Return on Capital Employed increased by 50bps to 10.1% against a 2018 IFRS 16 comparative figure 
 
· Continued strong free cash flow generation of GBP195m 
 
Strategic progress 
 
· Merchant businesses outperformed challenging end-markets, benefitting from business simplification and 
greater local empowerment 
 
· Acceleration of Toolstation UK expansion continued with 65 new branches opened and the acquisition of a 
controlling share of Toolstation Europe 
 
· Process to demerge Wickes well progressed, due for completion in Q2 2020 
 
· Process to divest the P&H business paused during period of significant uncertainty, sale of the PF&P 
wholesale business completed in January 2020 
 
· Cost reduction actions on track; streamlining above-branch operations and increasing the agility of the 
Group 
 
Nick Roberts, Chief Executive Officer, commented: 
 
"Against a challenging market backdrop we have delivered a strong operational and financial performance 
across the Group. Our merchanting businesses gained market share as a result of a range of initiatives to 
improve our customer proposition, including increased local empowerment for our branch managers, while the 
pace of the Toolstation expansion accelerated. The actions put in place to improve our Wickes and Plumbing & 
Heating businesses meant that both recovered well during the year and made positive contributions towards the 
Group's overall performance. 
 
"Our strategic progress in 2019 has been significant, but there remains much work to do in order to build 
stronger foundations for the Group to deliver enhanced returns and long-term growth. Our immediate priorities 
are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further 
simplification of our business and successful delivery of the demerger of Wickes. 
 
"The long-term fundamental drivers of the Group's end-markets remain strong, and our businesses enjoy leading 
positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen 
some green shoots of recovery in our lead indicators, although it remains too early to point towards any 
tangible improvement in RMI. The Group remains focused on delivering against our key priorities, and we are 
optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and 
deliver improved returns for our shareholders." 
 
Enquiries: 
 
Travis Perkins                     Powerscourt 
Graeme Barnes                      Justin Griffiths / James White 
[phone]                [phone] 
[e-mail]  [e-mail] 
 
Zak Newmark 
[phone] 
[e-mail] 
 
Cautionary Statement: 
 
This announcement contains "forward-looking statements" with respect to Travis Perkins' financial condition, 
results of operations and business and details of plans and objectives in respect to these items. 
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or 
such words as "anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "seeks", 
"intends", "plans", "potential", "reasonably possible", "targets", "goal" or "estimates", and words of 
similar meaning. By their very nature forward-looking statements are inherently unpredictable, speculative 
and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in 
the future. There are a number of factors that could cause actual results and developments to differ 
materially from those expressed or implied by these forward-looking statements. These factors include, but 
are not limited to, the Principal Risks and Uncertainties disclosed in the Group's Annual Report, changes in 
the economies and markets in which the Group operates; changes in the legislative, regulatory and competition 
frameworks in which the Group operates; changes in the capital markets from which the Group raises finance; 
the impact of legal or other proceedings against or which affect the Group; and changes in interest and 
exchange rates. All forward-looking statements, made in this announcement or made subsequently, which are 
attributable to Travis Perkins or any other member of the Group or persons acting on their behalf are 
expressly qualified in their entirety by the factors referred to above. No assurances can be given that the 
forward-looking statements in this document will be realised. Subject to compliance with applicable law and 
regulations, Travis Perkins does not intend to update these forward-looking statements and does not undertake 
any obligation to do so. Nothing in this document should be regarded as a profits forecast. 
 
Without prejudice to the above: 
 
(a) neither Travis Perkins plc nor any other member of the Group, nor persons acting on their behalf shall 
otherwise have any liability whatsoever for loss howsoever arising, directly or indirectly, from the use of 
the information contained within this announcement; and 
 
(b) neither Travis Perkins plc nor any other member of the Group, nor persons acting on their behalf makes 
any representation or warranty, express or implied, as to the accuracy or completeness of the information 
contained within this announcement. 
 
This announcement is current as of 3 March 2020, the date on which it is given. This announcement has not 
been and will not be updated to reflect any changes since that date. 
 
Past performance of the shares of Travis Perkins plc cannot be relied upon as a guide to the future 
performance of the shares of Travis Perkins plc. 
 
*Summary* 
********* 
 
Basis of preparation 
 
The Group's 2019 audited results are reported on the following basis: 
 
· The Group is reporting its accounts under IFRS 16 - Leases which treats all lease obligations as debt, 
leading to changes in the income statement and balance sheet. Illustrative comparatives have been presented 
as if the new standard had applied in 2018. 
 
· The acquisition of a majority holding in Toolstation Europe was completed on 30 September 2019, and since 
that date the financial results have been fully consolidated. 
 
· The financial results for the Plumbing & Heating business have been consolidated into the Group results, 
reflecting the pause of the intended sale process in late 2019 due to high levels of uncertainty in the UK 
macro environment. 
 
*Financial performance* 
 
The Group produced a positive performance in 2019 against a challenging market backdrop, with early signs of 
progress from the strategic initiatives set out in December 2018. Total Group revenues grew by 3.2% in 2019 
 to GBP6,956m, and by 3.8% on a like-for-like basis. Sales growth was driven by a good performance from the 
Merchant businesses despite the challenging market environment, with continued excellent growth in 
Toolstation and a strong recovery in Wickes. The P&H business recorded a modest reduction in sales across the 
year, but this reduction was concentrated in the lower margin wholesale business, whilst the branch-based 
business continued to grow. 
 
 Adjusted operating profits grew to GBP442m, an increase of 7.8% when compared to the 2018 illustrative 
 comparative (including the impact of IFRS 16). The increase of GBP32m was driven by improvements in all 
segments, with the biggest increase coming from the strong recovery in Wickes. Toolstation UK also grew 
profits strongly, but this was offset by the consolidation of Toolstation Europe in Q4, and the corresponding 
 losses of around GBP4m. The transformation of P&H continued to make good progress, improving the balance of 

(MORE TO FOLLOW) Dow Jones Newswires

March 03, 2020 02:00 ET (07:00 GMT)