Travis Perkins plc has released its interim results for the six months ended 30 June 2020, sounding a positive note following a rocky period in Q2.

Despite being significantly impacted by the Covid-19 pandemic and a financial performance below H1 2019, in the statement, the Group congratulates itself on having "significantly strengthened its core and found new ways to deliver excellent service to both its trade and retail customers."

The Group made what it calls an encouraging start to 2020 with revenue growth of 2.4% in the 11 weeks to 18 March. However, as the impact of the pandemic spread to the UK and the lockdown period was implemented, overall revenue in the first half of the year declined by 20% to £2,781 million and by 19% on a like-for-like basis. This resulted in an adjusted operating profit of £42 million (H1 2019: £220 million). A decline of 81% on the same period last year.

While Toolstation’s revenue is up 37% on the first half of 2019 to £285 million, Merchanting revenue is down 26% to £1,385 million (H1 2019: £1,869 million) and Plumbing and Heat revenue is down by a third to £475 million (H1 2019: £713 million).

Taking into account £129 million of adjusting items (principally resulting from the business restructuring actions announced in June 2020), the Group delivered a statutory operating loss of £92 million (H1 2019: operating profit of £62 million).

Shares for the business fell by 7.4% following the announcement.

From late March 2020, at the onset of the lockdown period, the Group ran a "service-light" operating model, focusing on serving customers through remote, non-contact channels. Around a third of Merchanting branches were open, while Wickes and Toolstation relied on their digital capabilities to operate the majority of their branch networks as fulfilment centres for digital transactions.

Through May and June, more of the Group's Merchant network returned to operation to support the early recovery of UK construction activity. In late May, Wickes and Toolstation began, under strict safety guidelines, to welcome customers back into stores, with a corresponding step up in DIY activity supporting the Group's overall performance. 

The strength of the DIY market was not matched by new housebuilding and major commercial projects, which experienced a slower return to activity.

In the first half of the year, the Group has benefited from around £45 million of furlough support, with very few colleagues remaining on furlough beyond the end of June. The overall benefit of Business Rates Relief across the 12 months of the scheme is expected to be around £80 million, with 75% to be realised in 2020, including around £20 million in the first half of the year.

In addition, a decision was taken by the Board of Directors and the Group Leadership Team to reduce their salaries by 20% from 1 May for a period of three months.

On 15 June 2020, a programme of restructuring was announced, resulting in the planned closure of 165 branches, primarily across the trade merchant businesses. In the main, these branches were closed by the end of June with the remainder closed by the beginning of August. Combined with redundancies at corporate level, the number of roles to be lost is around 2,500, equivalent to 9% of the workforce.

Since December 2018 the Group has embarked on a strategy to reduce the number of branches, particularly around large UK conurbations, in order to operate from fewer, larger branches with greater breadth and depth of product range. The restructuring in response to the crisis accelerated the process.

In Plumbing & Heating, a number of lower-performing branches were closed in parallel with a reduction in headcount across the business to reflect lower anticipated volumes in the short to medium term.

These restructuring actions are expected to deliver operating cost savings of approximately £120 million on an annualised basis, with the vast majority of actions completed by the end of August 2020. However the exercise is expecting to cost £111 million over several years.

In December 2018, the Group laid out its plans for the years ahead, and in March 2020, four key strategic priorities were identified towards achieving these goals:

  • Successful demerger of the Wickes business
  • Regeneration of the Travis Perkins general merchant
  • Acceleration of the expansion of the Toolstation business, in the UK and overseas
  • Deliver an organisational platform fit for the future.

The Covid-19 pandemic has acted as a catalyst for changes across the operations of the Group, and a number of strategic initiatives, set out at the full-year 2019 results in March, due to take place over a two-year period, have been achieved in a matter of months.

Over the course of five weeks, the transactional web platform for the Travis Perkins general merchant was rebuilt, in response to a significant rise in web-based transactions, while an online portal was developped with an app under trial. 

In Toolstation, the balance of trading also shifted, with click & collect transactions increasing from around 10% to around 90%. This led to moving forward months of development projects for the IT infrastructure.

Wickes stores expanding their established roles as fulfilment centres driving click & collect sales up over 1,000%. A move to virtual customer meetings was also made to support the reopening of the Kitchen & Bathroom showroom business.

TP experiencing an increase of around 10ppts in orders being delivered, with two thirds of product now being delivered, and a similar trend across the specialist merchants. A staff app is under test that will help with increased levels of stock picking and provide greater data accuracy around stock. 

In Toolstation UK, one of the branch fulfilment warehouses was converted in a matter of days to be able also to pack parcels for direct customer delivery. Whilst the branch expansion programme was temporarily halted, it has now resumed with 19 branches opened in July and August, and the business on course to achieve the planned 60 openings in 2020.

While the Group placed on hold the plans to dispose of the Plumbing & Heating business in September 2019 due to Brexit uncertainty, it took the opportunity to dispose of the low margin PF&P wholesale activity in January 2020. It remains the intention of the Board to sell the P&H business, whilst in the short term continuing to drive operational improvements to improve returns further and to optimise value for shareholders. 

On 20 March, the Group announced that it had placed the demerger of Wickes on hold in order to focus on managing through the pandemic and to maximise liquidity across the Group. The Board continues to believe the demerger of Wickes will allow both businesses to fulfil their potential and will pursue it when market conditions are more settled and will update the market in due course.


The statement decalres the long-term fundamentals of the Group's end markets to remain robust, with ongoing demand for new housing and underinvestment in the repair, maintenance and improvement (RMI) of the existing UK housing stock. It also warns of significant uncertainty remaining in the UK economy in the near term.

The Group welcomes Government stimulus for the UK construction sector as it recovers from the COVID-19 crisis, with commitments regarding infrastructure investment, green home improvement schemes and SDLT reductions.

The statement notes a recent strong recovery in secondary housing transactions, but cautions that it is not yet clear whether this is a sustained trend or a release of pent up demand. The company adds that it is likely that an increase in unemployment will have a detrimental impact on consumer confidence, and therefore the Group remains cautious on the volume outlook for building materials in the near term.

Group like-for-like sales trends in July and August have returned to close to prior year levels which is supported by domestic RMI and current strong trading in consumer DIY markets. 

Nick Roberts, Chief Executive Officer, commented: "Throughout the pandemic, the health and safety of our colleagues and customers has been our primary concern. Customer interactions have changed significantly resulting in changes to the way we do business, from increased activity through digital channels through to alterations to our physical store formats in order to maintain safe working practices.

"Although our financial performance in the first half of 2020 was impacted by the Covid-19 pandemic, and we have had to undertake a restructuring programme in light of the challenging outlook for the Group's end markets, we have made significant strategic and operational progress against the four strategic priorities we outlined at our full year results in March 2020. 

"Although considerable uncertainty around the impact of the COVID-19 pandemic remains, the actions we have taken to adapt and innovate in our businesses mean that the Group is well placed to continue to service our customers, support our colleagues, outperform our markets and generate value for our shareholders."