Travis Perkins PLC
04 July 2005
4 July 2005
Travis Perkins PLC
Interim pre-close Trading Statement
Travis Perkins PLC, the leading UK builders' merchant and DIY retailer, today
issued the following trading statement for the first six months of 2005:
Overall group turnover for the first six months, including the effect of the
acquisition of Wickes, was up by 41%, with like-for-like ('LFL') turnover per
trading day (i.e. after adjusting for one extra trading day in 2004) lower by
0.5%. Progress on combining the Travis Perkins and Wickes businesses is running
ahead of expectations.
In the Travis Perkins builders' merchant business (65% of total merchanting
turnover) for the first six months of 2005, total turnover per trading day was
up by 6.2% with LFL turnover per trading day up by 1.6%. In this period, our
specialist merchanting businesses (35% of total merchanting turnover),
comprising Keyline, CCF and City Plumbing, saw total turnover per trading day
lower by 1.3%, and LFL turnover per trading day lower by 4.1%, reflecting mainly
weaker showroom sales in City Plumbing.
The sharp slowdown in consumer spending from February has had some impact on
volumes in the trade market, particularly in RMI, in the second quarter. The
more consumer-related RMI activity, especially in plumbing and heating, was
affected, although our business in commercial sectors and sectors related to
government spending remained robust.
The group has taken further action in merchanting to boost productivity - up by
2% in the first half - and gain market share, while protecting gross margins -
slightly up in the first half. Buying benefits and other synergy gains from the
work to integrate Wickes into the group are running ahead of the group's
original expectations despite lower base volumes. Synergy projects outside the
buying area are now being accelerated to produce further cost reductions.
The group's earlier prediction for a gradual recovery in the DIY market has been
borne out by experience in the second quarter, although the improvement has been
patchy and slower than anticipated.
At Wickes, which was acquired by the group on 11 February 2005, total turnover
for the 26 week period to 26 June 2005 was down by 1.7%, with LFL turnover down
by 4.9%. LFL turnover of core products (84% of Wickes' sales) were down by 4.2%.
The LFL performance, whilst showing monthly variations, continues to indicate an
improved trend from the weakest position experienced, in February 2005, and
latest data available shows Wickes gaining market share from national
competitors. The home delivered showroom market, which accounts for around 16%
of Wickes' sales, continues to be soft as consumers rein back expenditure on '
larger ticket' items. Turnover in this category was off 8.4% on an LFL basis for
the 26 week period.
Since the start of 2005, the group has added a net 34 new branches in addition
to 172 acquired Wickes stores. The group now has 957 trading locations in the
UK.
While continuing to invest steadily in the growth of both the merchanting and
retail businesses, group net borrowings are running slightly lower than planned
levels due to tight control of working capital and capital expenditure.
We expect the trading environment for the remainder of 2005 to continue to be
challenging. Whilst we have taken prompt action to reduce costs this will not
fully offset the impact of the current trading environment, and our expectations
have been moderated accordingly. However, we expect to grow profits in
merchanting in 2005 as well as add profits and synergies from the acquisition of
Wickes.
Enquiries:
Geoff Cooper, Chief Executive
Paul Hampden Smith, Finance Director
Travis Perkins PLC +44 (0) 1604 683131
David Bick/Trevor Phillips
Holborn Public Relations +44 (0) 207 929 5599
ends
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