Interim Management Statement

RNS Number : 9945R
Travis Perkins PLC
10 May 2009
 




Travis Perkins plc

11 May 2009


Travis Perkins plc


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


Interim Management Statement

For the period from 1 January 2009 to 11 May 2009

Travis Perkins plc, one of the UK's largest builders' merchant and home improvement retailers, today issues this Interim Management Statement for the period since 31 December 2008.

Overall the Group has performed ahead of the Board's expectations in the first four months of 2009 in markets that have, as anticipated, continued the slowdown seen throughout 2008.


Group revenue for the four months ended 30 April 2009 was down by 13.6 per cent. with like-for-like sales down 14.4 per cent., giving rise, as expected, to a reduction in the Group's profit before tax compared to the same period in 2008.


Merchanting


For the four months ended 30 April 2009, Merchanting revenue declined by 18.4 per cent and on a like-for-like basis by 19.0 per cent., compared to the same period in 2008. The decline in like-for-like sales was evenly balanced between General and Specialist Merchanting.


Merchanting's like-for-like sales in the months of March and April 2009 decreased by 18.4 per cent. over the same months in 2008, reflecting a continuation of like-for-like sales decline. 


Against competitive market conditions and continued high cost inflation, particularly on heavy building materials, Merchanting has been successful in limiting gross margin erosion and the Board believes it has also been successful in passing on the majority of product cost increases. The Board has chosen not to pursue low margin sales.


Retail


Revenue for Retail for the 18 week period ended 2 May 2009 declined by 1.9 per cent., with like-for-like sales declining by 3.6 per cent. on a delivered basis compared to the same period in 2008. Like-for-like sales for Retail on an ordered basis over the same period declined by 1.6 per cent.


Over this period, Wickes made significant gains in kitchen and bathroom revenue with like-for-like sales on a delivered basis up by 12.5 per cent. and on an ordered basis up by 22.8 per cent. over the same period of 2008. Wickes initiated a successful change in promotional strategy utilising television advertising instead of predominantly relying on paper based catalogues and advertising materials, which the Board believes enabled it to increase its revenue from sales of kitchen products in the early part of 2009 following the liquidation of a competitor. Like-for-like sales of Wickes' core products decreased by 6.5 per cent. over the same period of 2008.


Wickes had a successful Easter period reflected by like-for-like sales improvement for March and April 2009 combined of 2.9 per cent. over the same months in 2008. Strong kitchen and bathroom revenue during the two month period improved Wickes' gross margin with a slight gain on the previous year.


Property


The Group has continued its programme of active management of its property portfolio and during the four months ended 30 April 2009 generated £2.6 million profit (£0.6 million cash received). In addition, the Group has exchanged contracts on transactions which will realise £2.2 million of profit upon receipt of planning consent and is in an advanced stage of negotiation in respect of transactions which would realise a profit of more than £7.5 million if completed.


Overhead costs


Overhead costs comprising selling and distribution costs and administration expenses were tightly controlled in the four months ended 30 April 2009, and cost reductions are running just ahead of the Group's targeted £50 million reduction of costs in 2009 when compared to 2008.


Net debt


The Group's net debt position at 31 March 2009 of £984.6 million improved ahead of the Board's expectations principally due to further improvements in inventory reduction and the performance of Wickes, as described above.


Prospects


The Board expects the markets in which the Group operates to continue to weaken until at least the third quarter of 2009. The Board believes recent lead indicators relating to the housing market, such as mortgage approvals; housing transactions and house prices; consumer and customer confidence; and construction orders generally show signs of stabilisation. However the impact of any potential increases in unemployment on these markets and indicators is uncertain. The Board has continued to manage the business according to its current operational priorities, including cash maximisation and cost control, while maintaining the benefits of Group scale.


In addition, a rights issue has been launched as set out in the separate announcement issued today.

- ends - 


Enquiries:



Geoff Cooper, Chief Executive Officer


Paul Hampden Smith, Finance Director


Travis Perkins plc

+44 (0)1604 683 112



David Bick/Mike Feltham/Mark Longson


Square1 Consulting Limited    

+44 (0)20 7929 5599


    


                    


This information is provided by RNS
The company news service from the London Stock Exchange
 
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