Travis Perkins: positive start despite conditions

Builders merchant group Travis Perkins saw group like-for-like sales growth of 7.3% and total sales growth of 5.4% in the first quarter of 2019, compared with the same period a year previously.

A trading update issued this morning (May 8) showed strong merchanting like-for-like sales growth of 10.6%, the continued acceleration of Toolstation growth, with 25% total sales growth and a good recovery in performance at DIY chain Wickes with 10.5% like-for-like sales growth.

Keyline Leeds 1208 Low res

The Plumbing and Heating division, which is currently up for sale,  saw an expected slowdown in like-for-like (-4%) and total sales (8.2%) as the weather conditions were milder in Q1 2019 compared to 2018. Both the branch network and specialist online channels showed good sales growth, which was offset by a decline in the wholesale business.

Travis Perkins Chief Executive John Carter said: “We have delivered strong sales growth in the first quarter of the year, which reflects both our focus on excellent customer service and the weak comparator in 2018. This performance is all the more encouraging given the impact of the on-going political uncertainty on our end markets.

“The Merchanting businesses have maintained the strong growth trend from the end of 2018, and Toolstation continues to grow extremely well, driven by network expansion and existing stores maturing. Wickes posted encouraging sales growth figures in both core DIY and showroom categories, demonstrating a strong turnaround in Kitchen and Bathroom performance. In Plumbing & Heating the milder winter has impacted sales compared to 2018, but our branches and specialist online channels have continued to perform well. The work to operationally separate Plumbing and Heating is progressing to plan and is expected to be completed in Q2.

“The actions set out at our capital markets day in December 2018 to deliver best in class service to trade customers and to simplify the Group are well underway. We are making good progress on cost reduction activities and expect to meet our cost reduction targets this year. Overall expectations for the Group in 2019 remain unchanged.”

Travis Perkins generated like-for-like sales growth of 8%, continuing the improving trend from the end of 2018 and primarily driven by sales growth with larger regional and national customers, and through the Managed Services business. Keyline continued to perform strongly through its targeted civils and drainage product categories, particularly through direct-to-site deliveries. CCF continued to win market share through market-leading customer service and relationship management, although growth is likely to moderate through the year, partly due to product availability constraints in the supply chain. BSS has maintained the good sales growth momentum from 2018, further leveraging its clear market-leading position. In trade kitchens, Benchmarx sales are growing well, with one additional branch opened in the quarter.

Toolstation continued its impressive like-for-like sales and total sales growth, underpinned by the continued expansion of the store network, alongside the launch of the new website at the end of 2018 and the successful extension of online ranges which are helping to increase sales density. The business is on track to open 60 new stores in the UK in 2019, with encouraging progress in expanding the network in Europe.

Wickes had a strong performance in like-for-like sales and total sales growth from both core DIY and the Kitchens and Bathroom showroom

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About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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