Travis Perkins Group has released its financial results for 2019, showing like-for-like revenue growth of 3.8% with total revenue growth of 3.2%.
Sales growth was driven by a good performance from the merchant businesses despite a challenging market environment, with continued growth in Toolstation and a strong recovery in Wickes. The P&H business recorded a modest reduction in sales across the year, but this reduction was concentrated in the lower margin wholesale business, whilst the branch-based business continued to grow.
Adjusted operating profits grew to £442 million, an increase of 7.8% when compared to 2018. However the positive trading performance in 2019 was partially offset by the impact of the
halting of the ERP replacement programme due to "significant risks relating to performance of the system", and restructuring charges across the business.
The increase of £32 million was driven by improvements in all segments, with the biggest increase coming from the strong recovery in Wickes.
Toolstation UK also grew profits strongly and the expansion of company continued with 65 new branches opened, while the demerger of Wickes is still due for completion in Q2 2020.
The company made further payments relating to both Underfloor Heating Store and National Shower Spares, and acquired a majority stake in Toolstation Europe.
Although the process of divesting the P&H business was paused during a period of "significant political and economic uncertainty", the sale of the PF&P wholesale business was completed in January 2020. The intention to divest the P&H business remains in place although there is no specific timeframe of divestment.
Nick Roberts, Chief Executive Officer, commented: “Against a challenging market backdrop we have delivered a strong operational and financial performance across the Group.
“Our merchanting businesses gained market share as a result of a range of initiatives to improve our customer proposition, including increased local empowerment for our branch managers, while the pace of the Toolstation expansion accelerated.
“The actions put in place to improve our Wickes and Plumbing & Heating businesses meant that both recovered well during the year and made positive contributions towards the Group’s overall performance.
“Our strategic progress in 2019 has been significant, but there remains much work to do in order to build stronger foundations for the Group to deliver enhanced returns and long-term growth.
“Our immediate priorities are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further simplification of our business and successful delivery of the demerger of Wickes.
“The long-term fundamental drivers of the Group’s end-markets remain strong, and our businesses enjoy leading positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen some green shoots of recovery in our lead indicators, although it remains too early to point towards any tangible improvement in RMI.
“The Group remains focused on delivering against our key priorities, and we are optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and deliver improved returns for our shareholders.”