LONDON (dpa-AFX) - Travis Perkins plc (TPK.L), a distributor of building materials, said that it plans to cut about 2,500 jobs or about 9% of the workforce. It also plans to close around 165 branches across the overall branch estate, or about 8% of the group's network, as the fallout from the covid-19 crisis deepens across the industry.
The company noted that branch closures will be concentrated in the Merchant businesses, in particular the Travis Perkins General Merchant, focusing on small branches where it is either difficult to implement safe distancing practices, or where marginal profitability will be eroded in a reduced volume environment.
According to the company, there has been a significant recovery in trading volumes in recent weeks. But, the UK is facing a recession and this will have a corresponding impact on the demand for building materials during 2020 and 2021.
The company stated that group volumes in May were around 60% of prior year with an improving trend throughout the month. The Group's weekly volume run rate is now around 85-90% of prior year with particular strength in Wickes' core DIY ranges and in Toolstation, with both businesses demonstrating improving like-for-like growth versus 2019.
Across the Merchanting and Plumbing & Heating businesses, volumes are now around 80% of prior year with more marked differences between the businesses depending on the customer category mix and also with some regional variations.
As of on 12 June, the Group had cash deposits of 363 million pounds, and taken together with the undrawn 400 million pounds Revolving Credit Facility, overall liquidity headroom of 763 million pounds.
The company said it will publish its interim results in early September.
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