Builders merchants Travis Perkins have seen a fall in sales of 19% on a like-for-like basis at their merchanting division for the first four months of 2009.
Group revenue was down by 13.6% with like-for-like sales down 14.4%, according to an interim management statement, issued this morning.
The 19% decline in like-for-like merchanting sales was evenly balanced between the group’s General and Specialist Merchanting.
On the retail side, for the 18 week period ended 2 May 2009 fell by 1.9%, with like-for-like sales down 3.6%, compared to the same period in 2008.
Over the period, Wickes increased kitchen and bathroom sales significantly, with like-for-like sales on a delivered basis up by 12.5%. and on an ordered basis up by 22.8%. The rise has shown the success of the change in promotional policy, namely, using television advertising instead of predominantly relying on paper based catalogues and advertising materials. The demise of MFI also helped significantly. Like-for-like sales of Wickes’ core products decreased by 6.5 per cent. over the same period of2008.
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.
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.
The Board expects the market to continue to weaken until at least the third quarter of 2009, with 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 company has launched a rights issue to raise £314m to help improve the debt situation.