Trading update

RNS Number : 2502E

Travis Perkins PLC

17 December 2009

 



17 December 2009

TRAVIS PERKINS PLC

("Travis Perkins", or "the Company")

Trading update

Travis Perkins, the leading UK builders' merchant, is today issuing a trading update ahead of entering its closed period for the year ending 31 December 2009.

Recent trading trends have confirmed our view that the merchanting market has stabilised, and the retail market has continued to enjoy a steady revival in activity.

Group turnover for the eleven months to the end of November 2009 was down 8.5% compared to the equivalent period in 2008. 

In our merchanting division total turnover for the eleven months was down by 13.3%. Whilst like-for-like turnover per trading day for this period was down by 14.3%, the decrease in like-for-like sales for the last two months has improved to 5.5%, as 2008 comparatives continue to ease. The decline in volume relative to peak levels in early 2008 appears to have reached a plateau, but we have yet to see any signs of any sustained improvement. Gross margin pressure has remained consistent with the trend experienced throughout 2009.

Our merchanting division comprises businesses in general and specialist merchanting markets. Total turnover in general merchanting was down by 13.6%, with like-for-like turnover per trading day down by 14.8%. For this period total turnover in specialist merchanting was down by 12.7% and like-for-like turnover per trading day down by 13.5%. 

Substantially all the turnover in our retail division is represented by Wickes, our home improvement store chain. In Wickes, total turnover for the 48 week trading period to 28 November was up 2.6%. Like-for-like sales per trading day were up by 2.3%, with core products down by 1.4%, but showroom sales up by 23.1%. For the nine weeks to 28 November we have seen Wickes make strong market share gains with total like-for-like turnover per day up by 10.2%.

Management throughout the Group has been focused on cost control with the result that we have achieved the overhead savings anticipated. Cash generation has remained at the forefront of our activities, with the result that net debt has further reduced during the second half of the year.

Despite maintaining strong control over capital expenditure, we have still managed to expand our branch network, although at a much slower rate. Having added a net 5 Merchanting branches, 2 Wickes stores, 7 Tile Giant stores and, through our associate company, 26 ToolStation stores during 2009 we now trade from 1296 locations.  

These sales trends mean that Group trading for the last two months since our October Interim Management Statement is a little ahead of our expectations. This, together with further one-off employment related savings, means that we now expect earnings to be at the upper end of market expectations for 2009. However, given the probable pressures on both consumer and trade spending in 2010, our outlook for 2010 remains unchanged from that stated two months ago. Therefore, our view of the current market consensus for 2010 also remains unchanged. 

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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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