Interim Management Statement

RNS Number : 9845L

Travis Perkins PLC

17 May 2010

 



Travis Perkins plc

("Travis Perkins plc", or "the Group")

Interim Management Statement

For the period from 1 January 2010 to 30 April 2010

Strong rebound from slow start in first two months

Travis Perkins plc, one of the UK's leading builders' merchant and home improvement retailers, today issues this Interim Management Statement for the four months since 31 December 2009.

Group revenue for the four months ended 30 April 2010 was up by 2.2%, with like-for-like sales up 1.4 %.

Merchanting

For the four months ended 30 April 2010, Merchanting Division revenue increased by 3.3% including like-for-like growth of 2.8%, compared to the same period in 2009. The increase in like-for-like sales was split 2.2% for General Merchanting and 3.9% for Specialist Merchanting.

Over the first four months of the year our merchanting businesses reported an improving sales trend with like-for-like revenue in the months of March and April 2010 increasing by 6.1% over the same period in 2009, reflecting continued gains in market share. This improving sales trend has continued with a strong start to trading in the first two weeks of May.

Gross margins for the first four months are now only slightly lower than in the comparable period in 2009, representing an improving trend. This reflects better competitive conditions and gains from sourcing and pricing initiatives offsetting lower product inflation.

Retail

Revenue for our Retail Division, on a delivered basis, for the 17-week period ended 1 May 2010, increased by 0.3%, with like-for-like sales declining by 1.7% compared to the same period in 2009.

Over this period, Wickes made significant gains in kitchen and bathroom ("K&B") revenue with like-for-like sales on a delivered basis up by 12.6% over the same period in 2009. This strong performance reflects the impact of a number of new K&B trading initiatives launched throughout 2009.

Whilst like-for-like sales of Wickes' core products in this 17-week period decreased by 5.1% over the comparable period in 2009, Wickes has also reported an improving trend. In the last 9 weeks the decline in Wickes' core sales has been at a lower average of 3.8% despite the disadvantage of an earlier Easter holiday and, as with our merchanting division, the improving trend has continued into the first two weeks of May.

Despite an increase in competitor promotional activity, Wickes gained market share and maintained gross margins over this period. As expected, the rate of market share gain will begin to abate through 2010 as Wickes' new strategy in the kitchen and bathroom market begins to mature.

Property

The Group has continued its programme of active management of its property portfolio programme and has recently agreed the sale of part of its freehold site in Guildford yielding £18m of cash (£11m to be received in 2010) and £12m (£8m to be recognised in 2010) of profit. This transaction secures our annual target for profits from property for 2010. We remain committed to reflecting, through profits from active management of our portfolio, the value of our property assets in our equity value.

This development will create an attractive trading location opposite the busiest retail park in Guildford, with a new leased Wickes store operating adjacent to a mixed trade park which will include refurbished Travis Perkins and City Plumbing businesses and a new Tile Giant outlet.

Net debt

The Group debt position continues to reduce in line with expectations. On 31 March 2010 the Group purchased £84.3 million of its term loan at a discounted value realising a profit of £2.6m on the transaction.

Geoff Cooper, Chief Executive, commented:

"Although consumers and homeowners still appear to be waiting to see what life is going to be like on this side of the election, we are pleased with the overall progress the Group has made in the first four months of the year. Current trading is ahead of management expectations, helping us to make inroads into the adverse effects of the weather-affected first two months of the year.

"We continue to take market share in testing conditions, underlining the strength of our organic growth strategy. Our more positive merchanting performance is more than balancing the effect of wary consumers currently holding on to their money."

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Enquiries:

Geoff Cooper, Chief Executive
Paul Hampden Smith, Finance Director
Travis Perkins plc	[phone]
David Bick / Mike Feltham / Mark Longson
Square1 Consulting Limited	[phone]

 

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