AGM Statement

RNS Number : 2596U

Travis Perkins PLC

13 May 2008

 



13 May 2008

TRAVIS PERKINS PLC

AGM Statement

Continued market share gains in slowing markets

Travis Perkins, the leading UK builders' merchant, issues this Interim Management Statement for the period since 1 January 2008 to 12 May 2008, ahead of its Annual General Meeting to be held at 12 noon today, 13 May 2008.

At today's Annual General Meeting in Northampton, the Chairman, Tim Stevenson, will provide the following trading update:

'Our business has made good progress in the first four months of 2008 in markets that have, as anticipated, continued the slowdown which started in the last quarter of 2007.

'In total, our Group turnover to the end of April was up by 6.8 % compared to the equivalent period in 2007.

'For the first four calendar months of 2008, total turnover in our merchanting division was up by 8.2%, with like-for-like turnover per trading day up by 3.0%. Total turnover in the general merchanting business was up by 6.8%, with like-for-like turnover per trading day up by 3.0%. For this period, our specialist merchanting business increased total turnover by 10.9% and increased like-for-like turnover per trading day by 3.1%.

'Our merchanting division like-for-like sales performance for this period is ahead of estimated market growth. Our like for like sales were flat across March and April combined.  This reflects a slowing in markets, an early Easter and a strong comparator in the previous year.  We continue to see the benefits of initiatives taken to improve operational performance across the estate which partly mitigate the combination of high product cost inflation and increasingly competitive selling conditions.

'In our retailing division total turnover for the 17 week period ending April 26 was up by 3.3%.  Tile Giant represented 1.8% of this increase and Wickes 1.5%. For this period, Wickes like-for-like sales per trading day were down 3.0%, with core products down 2.8% and showroom sales down 3.9%.  Like-for-like daily turnover in the last eight weeks was down 4.9%.  Our retailing business has also continued to grow both its like-for-like and total market share in this period, with gains from a number of product range extensions and refreshes.

'The Group announces that it has refinanced its existing five year borrowing facility, which was arranged in 2004 to facilitate the acquisition of Wickes and which was due for repayment in December 2009.  The new £1billion facility which has a duration of five years from April 2008, replaces the £900 million remaining of our existing facility and when taken together with $400 million previously raised through a US private placement provides sufficient resources to support continuation of the Group's strategy of network expansion.

'The Group continues to exercise tight control over costs and cash flow remains good, and productivity is ahead of 2007.  In view of the difficult market outlook our Group headcount will continue at a level of around 800 or 5% below our originally planned level throughout the year.

'Since the end of 2007, we have added a net 26 new branches to our merchanting network and eight new Wickes stores, together with 36 Tile Giant stores, so that we now trade from 1195 locations.  In the first quarter we have spent £30 million on capital expenditure and a further £30 million on acquisitions.  We are continuing to expand, while raising our return thresholds and lowering goodwill prices, to reflect the current economic environment. Our recent experience shows that acquisition prices have not yet fallen sufficiently to reflect prevailing circumstances and we have therefore withdrawn from a number of acquisition possibilities. As a result, and without a significant upturn in market conditions, it is likely that our current rate of capital expenditure and acquisition spend will halve for the remainder of the year.

'As indicated in March, we expect our markets to weaken further as the year progresses.  Recent lead indicators, particularly from the housing market, and on declining consumer confidence and disposable income, confirm this continued slowing of activity levels. In that context, with our resilient business model and increased banking facility, we are in a sound position to mitigate the cash and profit effect of a tougher trading environment.'

Enquiries:

Geoff Cooper, Chief Executive

Paul Hampden Smith, Finance Director

Travis Perkins PLC                                                                           [phone]

David Bick/Mike Feltham/Mark Longson

Square1 Consulting Limited                                                                [phone]

 

END

 

 

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