Travis Perkins (TPK)
Travis Perkins: Travis Perkins: Publication of 2019 Annual Report
03-March-2020 / 15:00 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 2019
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 2019. The Company's Annual Report 2019
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 2019;
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
Robin Miller
Ribin.miller@travisperkins.co.uk
+44 (0) 1604 592533
STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
For the year ended 31 December 2019
The Group's risk management activities continue to be developed to support
management in identifying both threats and opportunities that could
materially impact strategic delivery, performance, compliance and
reputation. The Group operates in markets and an industry which, by their
nature, are subject to a number of inherent risks. In common with most large
organisations the Group is also subject to general commercial, political and
economic risks. The Group is able to mitigate those risks by adopting
different strategies and by maintaining a strong system of internal control
which is routinely tested and assured. 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.
Risk management framework
The Board has developed 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. Further details of the
Group's risk management processes and oversight are given in the Corporate
Governance Report on page 75.
The Board undertook an enhanced exercise during 2019 to consider the nature
and level of risk it is prepared to accept to deliver the strategy. Risk
appetite is set across a suite of risk categories directly relevant to the
Group, supported by high-level risk statements which set out the
expectations for the management and control of each category of risk. The
resulting assessment of risk appetite has been set to balance opportunities
for growth and business development in areas of potentially higher risk and
return, whilst prioritising safety and maintaining the Group's reputation,
legal and regulatory compliance and the desired high levels of customer
service and satisfaction.
Principal risks
At least twice a year, the Board and Group Leadership Team formally assess
the Group's principal risks. The table on pages 40 to 51 sets out, in no
particular order, the principal risks that are currently considered by the
Board to be material to the achievement of the Group's objectives, their
potential impacts, mitigating factors and those areas of the businesses'
strategies that are potentially impacted. The inherent risk (before the
operation of mitigating controls) is stated for each risk area together with
an indication of the current trend for that 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.
Key changes in the year
***********************
The risk environment in which the Group operates does not remain static. As
part of the ongoing risk review process, the Board and Group Leadership
Team: identify new risks for the Group, assess the inherent risk associated
with each principal risk, and determine whether the risk trend facing the
Group is increasing, decreasing or unchanged.
Whilst the risk profile for the Group remains relatively stable relative to
2018, the following key changes were identified in 2019:
- One additional principal risk has been disclosed in relation to IT
systems and infrastructure. This risk previously formed part of the risk
associated with change management and has been separated given the Group's
plans to modernise its IT infrastructure and replace a number of legacy
systems
- The inherent risk associated with business transformation initiatives,
including the IT modernisation programme, has been reassessed as "high" to
reflect the scale of change activities ongoing or planned within the Group
- The inherent risk associated with cyber threats and data security has
been increased to "high" to acknowledge that the continual changes in both
threat sources and the tactics employed by cyber criminals present an
ongoing challenge for all companies, including the Group
Emerging risks
**************
The Board is required to undertake a robust assessment of the emerging risks
that may impact the Group under the 2018 UK Corporate Code, which is
effective from 1 January 2019. In response to this requirement,
consideration of emerging risk has been integrated into the Group's current
risk management practices, which continue to be developed and refined. The
Board regularly considers the latest risk research alongside views on
emerging risks collated from assessments made by the business unit and
functional leadership teams. These risks are monitored but are not currently
assessed as sufficiently material to be considered as principal risks.
The Group is monitoring the potential impact of COVID-19 carefully. The
Group will continue to review the possible impacts on the business and
refine its contingency plans as more information about the epidemic emerges.
Risk workshops are undertaken periodically with the most significant
business units and are structured to consider a number of risk categories,
including "disruption", being the risks that may emerge and impact the
viability of a strategy or business model. The current statement of
principal risks recognises the potential for such disruption in the
competitor and customer landscape, as well as in relation to suppliers.
Category Principal risks Risk trend Inherent risk
External Changing customer High Medium High
and competitor High
landscape
-
Supplier risks
-
Brexit
-
Market conditions
-
Strategic Capital allocation Medium High
-
Change Management Medium
-
Portfolio
management -
Technological IT systems and - High High
infrastructure
-
Cyber threat and
data security
Operational Health and safety Medium
Talent management - Medium Medium
Legal compliance -
-
Key disruptive risks are also identified and mitigated by the Group. None of
them are currently considered to be principal risks
Risk Trend: - Increasing - Decreasing - Unchanged
CHANGING CUSTOMER AND
COMPETITOR LANDSCAPE
INHERENT RISK RISK MITIGATION
RISK: High DESCRIPTION
The Board is
TREND: The Group cognisant of the
Unchanged sells and risks and
distributes opportunities
building presented by the
materials changing customer
STRATEGY: through a and competitor
number of landscape and
channels. The evaluates
number of developments both
Best-in-class outlets and in terms of
services channels where threats and
building opportunities for
materials can the Group.. One
be purchased example of this in
Focus on continues to 2019 is the
trade grow with new decision to pursue
competitors the demerger of
entering the the Wickes
market. These business, and for
Advantaged new entrants the Group to focus
businesses may operate on the service of
business trade rather than
models which retail customers.
differ
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