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Travis Perkins: Travis Perkins: Publication of -4-

DJ Travis Perkins: Travis Perkins: Publication of 2019 Annual Report

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 

(MORE TO FOLLOW) Dow Jones Newswires

March 03, 2020 10:00 ET (15:00 GMT)

DJ Travis Perkins: Travis Perkins: Publication of -2-

IMPACT:       significantly 
              from the 
              traditional     The Group 
              merchanting,    continues to build 
Adverse       retail and      multi-channel 
effect        online formats  capabilities that 
              from which the  complement its 
              Group           existing 
              currently       operations and 
on financial  operates and    enable customers 
results       may take        to transact with 
              market share.   the Group through 
                              channels that best 
                              suit their needs. 
Loss of 
market share  The demerger 
              of the Wickes 
              business will   The Group is able 
              change the      to use its sites 
              risk profile    flexibly to 
              of the Group    respond to 
              in the coming   changes. 
              year, as        Alternative space 
              exposure to     utilisation models 
              the retail      are possible, 
              sector is       including 
              reduced.        maintaining 
                              smaller stores and 
                              implanting 
                              additional 
              Customer        services into 
              purchasing      existing branches. 
              habits also     During 2019, 
              continue to     Toolstation opened 
              evolve with an  its first high 
              increasing      street store. 
              percentage of 
              transactions 
              for the Group 
              now             The development of 
              originating     new, innovative 
              online.         and competitive 
              Customers'      supply solutions 
              preference for  is a key strength 
              purchasing      of the Group. It 
              materials       works closely with 
              through a       customers and 
              range of        suppliers on a 
              supply          programme of 
              channels and    continuous 
              not just        improvement to 
              through the     enhance the 
              Group's         customer 
              traditional     proposition. 
              competitors 
              may adversely 
              impact the 
              profitability   Pricing strategies 
              of              across the Group 
              branch-based    are regularly 
              operations and  reviewed and 
              the Group's     refined as 
              overall         necessary to 
              performance.    ensure they remain 
                              competitive. 
 
              Increasing 
              price 
              transparency 
              could lead to 
              a perception 
              that the Group 
              is less price 
              competitive 
              leading to 
              downward 
              pressure on 
              price and 
              margins. 
 
TALENT MANAGEMENT 
INHERENT      RISK            RISK MITIGATION 
RISK: Medium  DESCRIPTION 
 
                              The Group's 
TREND:        People are key  employment 
Unchanged     to the Group's  policies and 
              success. The    practices are kept 
              ability to      under regular 
              recruit,        review. Staff 
              develop,        engagement and 
              retain and      turnover by job 
              motivate        type is reported 
              suitably        regularly to the 
STRATEGY:     qualified and   Group Leadership 
              experienced     Team and the 
              staff is an     Board. A 
              important       Group-wide talent 
Best-in-class driver of the   and succession 
services      Group's         exercise was 
              overall         undertaken in 2019 
              performance.    and reviewed by 
              The Group may   the Board. 
Focus on      also be         Succession plans 
trade         exposed to      are reviewed 
              skills          annually; the 
              shortages in    process was 
              certain areas   reviewed for 2020 
Simplifying   which can       to ensure that 
the Group     result in       plans are in place 
              salary cost     for the Board, 
              pressures.      senior management 
              This may be     positions and 
IMPACT:       compounded by   other critical 
              Brexit if       roles and to 
              significant     promote the 
              numbers of EU   development of 
Adverse       citizens        diverse and 
effect on     decide to       inclusive 
delivery of   leave the UK    pipelines. 
strategy      (see also page 
              47). In 
              particular, 
              the             The Group's reward 
Competitive   availability    and recognition 
disadvantage  of suitably     systems are 
              qualified       actively managed 
              commercial      to ensure high 
              drivers is an   levels of employee 
              area of         engagement. 
              ongoing focus   Salaries and other 
              for the Group,  benefits are 
              which is        benchmarked 
              critical to     regularly to 
              the operation   ensure that the 
              of its fleet    Group remains 
              to meet         competitive and 
              customer        the Group operates 
              delivery        incentive 
              expectations.   structures to 
                              ensure that 
                              high-performing 
                              colleagues are 
              The strength    adequately 
              of the Group's  rewarded and 
              customer        retained. 
              proposition is 
              underpinned by 
              the quality of 
              people working  A wide range of 
              throughout the  training 
              Group,          programmes are in 
              particularly    place to encourage 
              in branch and   staff development. 
              other           Management 
              customer-facin  development 
              g roles. Many   programmes are 
              colleagues      available to those 
              have worked     identified for 
              for Travis      more senior 
              Perkins for     positions. The 
              many years,     Group's "Learn and 
              during which    Earn" 
              they have       Apprenticeship 
              gained          Programme ("LEAP") 
              valuable        has been in place 
              product and     for a number of 
              customer        years and has a 
              knowledge and   track record of 
              expertise.      successful 
                              delivery of 
                              apprenticeships in 
                              both branch-based 
              The Group       and functional 
              faces           roles. 
              competition 
              for the best 
              people from 
              other 
              organisations. 
              Ensuring the 
              retention and 
              development of 
              colleagues and 
              that robust 
              succession 
              plans exist 
              for key 
              positions is 
              important for 
              the Group to 
              ensure it has 
              the right 
              skills and 
              experience to 
              deliver on its 
              strategic 
              objectives. 
 
SUPPLIER RISKS 
INHERENT      RISK            RISK MITIGATION 
RISK: Medium  DESCRIPTION 
 
                              Making decent 
TREND:        The Group       returns is one of 
Unchanged     faces a number  the Group's 
              of supplier     cornerstones which 
              risks in        requires it to 
              relation to     treat both 
STRATEGY:     key             customers and 
              dependencies    suppliers fairly. 
              and             The commercial and 
              relationships,  financial teams 
Best-in-class overseas        have established 
services      sourcing and    strong 
              disintermediat  relationships with 
              ion, all of     the Group's key 
              which could     suppliers and work 
Focus on      adversely       closely with them 
trade         impact upon     to agree contracts 
              ranging and     that are 
              price.          beneficial to both 
                              parties and 
Simplifying                   facilitate 
the Group                     continuity of 
              The Group is    quality materials. 
              the largest     This interaction 
              customer to a   continues as the 
Financial     number of its   Wickes demerger is 
strength      suppliers. In   progressed and 
              some cases,     revised 
              those           contractual 
              suppliers are   arrangements are 
              large enough    put in place. 
              to cause the 
              Group 
              significant 
IMPACT:       difficulties    Where possible, 
              and disruption  contracts exist 
              if they are     with more than one 
              unable to meet  supplier for key 
Adverse       their supply    products, to 
effect on     obligations     reduce the risks 
financial     due to either   of dependency on a 
result        economic or     sole supplier. 
              operational 
              factors. 
              Alternative 
Adverse       sourcing may    The Group has made 
effect on     be available,   a significant 
reputation    but the         investment in its 
              volumes         Far East 
              required and    infrastructure to 

(MORE TO FOLLOW) Dow Jones Newswires

March 03, 2020 10:00 ET (15:00 GMT)

DJ Travis Perkins: Travis Perkins: Publication of -3-

the time it     support its direct 
              may take those  sourcing 
              suppliers to    operation. This 
              increase        allows the 
              production      development of own 
              could result    brand products, 
              in significant  thereby reducing 
              stock-outs for  the reliance on 
              a considerable  branded suppliers. 
              time,           The Group has also 
              adversely       adopted a 
              impacting       conservative 
              customer        hedging policy to 
              service and,    reduce its 
              potentially,    exposure to 
              leading         currency 
              customers to    fluctuations. 
              switch to a 
              competitor in 
              the short- or 
              long-term.      Independent checks 
                              are undertaken on 
                              the factories 
                              producing products 
              The Group       for the Group, 
              sources a       including the 
              number of       quality and 
              products from   suitability of 
              overseas        those products 
              factories,      before they are 
              which           shipped to the UK. 
              increases the   The results of 
              Group's         these checks are 
              exposure to     kept under review 
              sourcing,       with action taken 
              quality,        as necessary to 
              trading,        address any 
              warranty and    concerns 
              currency 
              issues. This 
              again may 
              adversely 
              impact 
              customer 
              service and 
              choice. 
 
              Manufacturers 
              of materials 
              and products 
              sold by the 
              Group may also 
              look to sell 
              directly to 
              end customers 
              in the future, 
              diminishing 
              the role of 
              distributors.. 
 
              The Group's 
              intended 
              demerger of 
              the Wickes 
              business, as 
              well as the 
              potential 
              future sale of 
              its Plumbing & 
              Heating 
              businesses, 
              will reduce 
              the size of 
              the Group, 
              which may 
              impact on its 
              ability to 
              renegotiate 
              future supply 
              contracts on 
              equivalent or 
              favourable 
              terms. 
HEALTH AND SAFETY 
INHERENT      RISK            RISK MITIGATION 
RISK: Medium  DESCRIPTION 
 
                              The Group 
TREND:        Keeping the     continues to 
Unchanged     Group's         challenge its 
              colleagues,     thinking and 
              customers,      approach to 
              suppliers and   improving its 
STRATEGY:     the public      safety performance 
              safe is a       through its now 
              cornerstone of  well established 
              the business    "Stay Safe" brand. 
Best-in-class and at the 
services      heart of how 
              it operates. 
              The Group       Governance of Stay 
              expects         Safe is well 
Financial     everyone to go  established and 
strength      home to their   designed to 
              families        promote a 
                              continual focus on 
                              health and safety. 
IMPACT:                       Stay Safe 
              safely          performance is 
              everyday.       reviewed at all 
                              Board Meetings, by 
Harm to our                   the Group 
colleagues,                   Leadership Team 
customers and The Group       and by the 
the wider     operates over   dedicated Stay 
community     two thousand    Safe Committee, 
              sites, many     which is chaired 
              with complex    by a Non-executive 
              and busy        Director. Safety 
Potential     yards. It also  performance is a 
legal action, operates one    focus at the 
fines and     of the largest  leadership 
penalties     vehicle fleets  meetings for each 
              in the UK,      of the Group's 
              distributing    business units, 
              heavy and       with regular 
Adverse       bulky           consideration of 
effect on     materials.      continuous 
financial     Poorly          improvement plans 
results       implemented     in this area. 
              safety          These forums also 
              practices on    monitor the 
              site, on the    achievement of 
Adverse       road and at     transport-related 
effect on     delivery        compliance 
reputation    locations       requirements, 
              could result    including driver 
              in significant  licensing and 
              harm to people  professional 
              which would     competence. In 
              damage the      addition, a number 
              Company's       of the business 
              reputation and  units, including 
              could impact    Travis Perkins, 
              trading         have retained FORS 
              performance.    accreditation of 
                              their vehicle 
                              fleets. 
 
                              During 2019 a 
                              programme of 
                              "Safety Deep Dive" 
                              reviews was 
                              introduced to 
                              assess how 
                              effectively key 
                              safety risks are 
                              managed and to 
                              benchmark the 
                              Group to leading 
                              practice. Safety 
                              management 
                              arrangements are 
                              periodically 
                              assessed and 
                              accredited by 
                              members of the 
                              Safety Schemes in 
                              Procurement Forum. 
 
                              Incidents are 
                              monitored, 
                              investigated and 
                              corrective action 
                              taken to reduce 
                              the likelihood of 
                              similar incidents 
                              in future. Stay 
                              Safe assurance 
                              reviews are 
                              regularly 
                              undertaken at all 
                              sites by dedicated 
                              safety 
                              professionals with 
                              any resulting 
                              improvement 
                              actions tracked to 
                              completion. 
 
                              De-risking the 
                              Group's 
                              operations, 
                              improving health 
                              and safety 
                              awareness and 
                              implementing 
                              improved ways of 
                              working are at the 
                              forefront of the 
                              Group's 
                              activities. 
                              Further 
                              information on 
                              progress made 
                              during the year 
                              can be found in 
                              the Health and 
                              Safety report on 
                              pages 52 to 67. 
CAPITAL ALLOCATION 
INHERENT      RISK            RISK MITIGATION 
RISK: Medium  DESCRIPTION 
 
                              Return on capital 
TREND:        The Group       is one of the 
Decreasing    manages a       Group's key 
              number of       performance 
              different       indicators as 
              businesses in   shown on page 21. 
STRATEGY:     the UK which    The Group's 
              operate in      decision to refine 
              different, but  its strategy and 
              complementary   focus on trade 
Focus on      channels. As    customers in the 
trade         the Group's     most advantaged 
              markets         businesses has 
              continue to     influenced the 
              develop, it is  allocation of 
Advantaged    investing to    capital during 
businesses    enhance its     2019, with more 
              existing        focused management 
              businesses and  attention and 
              also to         capital deployment 
Financial     develop new     in areas of higher 
strength      propositions    return. This 
              to better       capital allocation 
              serve its       policy is also a 
              customers.      driver for the 
                              Wickes demerger, 
                              enabling both 
                              Wickes and the 
              While the       remaining Group to 
IMPACT:       Group operates  pursue separate 
              a disciplined   strategies and 
              capital         priorities for 
              allocation      investment and 
Adverse       process, there  growth. 
effect on     is a risk that 
financial     it may be 
results       over-investing 

(MORE TO FOLLOW) Dow Jones Newswires

March 03, 2020 10:00 ET (15:00 GMT)

in channels     Responsibility for 
              which may       identifying and 
              decline or      implementing 
              that it may     opportunities to 
              not be          expand, improve or 
              allocating      modify the Group's 
              sufficient      operations rests 
              capital to new  with each of the 
              propositions    business unit 
              and advantaged  leadership teams. 
              businesses      Capital is 
              resulting in    deployed or 
              sub-optimal     re-deployed 
              returns on      through a 
              capital.        Group-led forum to 
                              strategically-alig 
                              ned projects 
                              expected to 
                              achieve the best 
                              return on capital. 
                              Projects are 
                              required to 
                              present a 
                              comprehensive 
                              business case and, 
                              for the largest 
                              investments, Board 
                              approval is 
                              sought. 
 
                              Major projects are 
                              reviewed by the 
                              Group Leadership 
                              Team, which 
                              introduced a 
                              monthly programme 
                              review during 
                              2019. Progress 
                              against plan is 
                              kept under close 
                              review. 
 
                              Post 
                              implementation 
                              reviews are 
                              undertaken of all 
                              major projects and 
                              returns are 
                              monitored on an 
                              on-going basis to 
                              ensure that the 
                              expected returns 
                              are achieved, but 
                              also to allow the 
                              Group to modify 
                              its capital 
                              allocation when 
                              appropriate. 
CHANGE MANAGEMENT 
INHERENT      RISK            RISK MITIGATION 
RISK: High    DESCRIPTION 
 
                              As set out in 
TREND:        The Group       relation to 
Increasing    undertakes a    capital 
              variety of      allocation, all 
              projects        potentially 
              throughout its  significant 
STRATEGY:     business in     projects are 
              order to        subject to 
              generate        detailed 
              returns for     investigation, 
Best-in-class its             assessment and 
services      shareholders.   approval prior to 
              These projects  commencement. 
              include the 
              modernisation 
Advantaged    of the Group's 
businesses    core IT         Dedicated teams, 
              systems and     including 
              infrastructure  financial 
              , on-going      resource, are 
Simplifying   development of  allocated to each 
the Group     its supply      project, with 
              chain           additional 
              operations and  expertise being 
              branch and      brought into the 
Financial     store           Group to 
strength      networks, and   supplement 
              the             existing resource 
              simplification  when necessary. 
              of the Group 
IMPACT:       to speed up 
              decision-makin 
              g and reduce    All strategic 
              costs.          projects are 
Adverse                       supported by an 
effect on                     appropriate 
financial                     governance 
results       By their        structure and are 
              nature, such    closely monitored 
              strategic       through the Group 
              projects are    Leadership Team's 
Adverse       often           programme review 
effect on     complicated,    with regular 
shareholder   interlinked     reporting to the 
value         and may         Board. 
              require 
              considerable 
              resource to 
              deliver. As a   Regular 
              result, the     communications are 
              expected        undertaken to keep 
              benefits,       colleagues 
              timescale for   informed. 
              delivery and 
              the costs of 
              implementation 
              of each         When projects do 
              project may     not deliver 
              deviate from    against 
              those           expectations, 
              anticipated at  exercises are 
              their outset.   undertaken to 
              Colleague       capture the 
              engagement may  "lessons learned" 
              be impacted     which are fed into 
              during a        future projects. 
              period of 
              significant 
              change and 
              cost-focus. 
 
              Following the 
              announcement 
              in 2019 to 
              delay the 
              Merchant ERP 
              replacement 
              programme, the 
              Group is 
              considering 
              its approach 
              to 
              implementation 
              of the various 
              elements of an 
              ERP system, 
              after 
              modernisation 
              of the core IT 
              architecture. 
              The results 
              and delays to 
              this programme 
              are 
              illustrative 
              of the 
              challenges 
              associated 
              with major 
              transformation 
              projects in 
              Group with a 
              number of 
              complex legacy 
              systems. 
BREXIT 
INHERENT      RISK            RISK MITIGATION 
RISK: High    DESCRIPTION 
 
                              It remains 
TREND:        The result of   difficult to 
Unchanged     the UK vote to  determine the full 
              leave the       impact of Brexit 
              European Union  on the Group. The 
              ("Brexit") and  Board continues to 
STRATEGY:     the subsequent  monitor 
              process to      developments and 
              determine the   market conditions 
              terms of the    and will react 
Best-in-class withdrawal      accordingly. 
services      agreement has 
              caused 
              considerable 
              market          The Board has 
Financial     uncertainty     undertaken a 
strength      throughout      process to assess 
              2019 and        the risks 
              continues to    associated with 
              do so. It       Brexit. This 
IMPACT:       remains         includes 
              difficult to    assessment of 
              predict the     existing risk 
              economic        mitigations and 
Adverse       outlook and     actions in 
effect on     impact to the   progress and is 
financial     Group in the    updated on a 
results       short term or   regular basis. 
              long term. The 
              Group 
              continued to 
              experience      The Group 
              significant     continues to 
              volatility in   invest in the 
              the value of    business where 
              sterling        those investments 
              against the     are expected to 
              principal       realise acceptable 
              currencies      returns, but it is 
              used to pay     prepared to flex 
              for imported    activity levels 
              goods during    should market 
              2019.           conditions so 
                              dictate. 
 
              Future trading 
              relationships   Throughout 2019, 
              with overseas   exercises were 
              markets have    undertaken by the 
              yet to be       business unit 
              determined and  leadership teams 
              these may       to assess the 
              result in       level of stock 
              higher tariffs  holding required 
              or duties on    in each business 
              imports of      unit to minimise 
              construction    disruption to 
              products as     customers as a 
              well as         consequence of 
              extended lead   Brexit. The Group 
              times on        has taken steps to 
              imported        minimise 
              supplies or     disruption to its 
              result in the   imports from the 
              need to source  EU and was granted 
              some products   Authorised 
              elsewhere.      Economic Operator 
              These risks     status by HMRC in 
              have the        early 2019. 
              potential to 
              impact the 
              Group 
              significantly.  Regular 
              Of less risk    communication 
              to the Group,   continues with 
              but             both customers and 
              potentially     key suppliers. A 
              significant     customer statement 
              for its         is in place and 
              customers, are  will be reassessed 
              the             as agreements with 
              significant     the EU are 
              numbers of      clarified. 
              non-UK 
              nationals 

(MORE TO FOLLOW) Dow Jones Newswires

March 03, 2020 10:00 ET (15:00 GMT)

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