Travis Perkins (LON:TPK), today announced interim results for the six months ended 30 June 2018
Highlights
Solid revenue growth of 4.4% with like-for-like growth of 4.2%.
Good trading performance in the trade focused businesses in General Merchanting, Plumbing & Heating, Contracts and Toolstation.
Challenging UK DIY market negatively impacting sales and profitability in Wickes, with significant cost reduction plans underway.
Cost reduction plans in progress across the Group with benefits weighted towards H2 2018.
Adjusted operating profits decline of 5.8% primarily reflects sales mix, with weaker Kitchen and Bathroom showroom sales in Wickes, and higher operating costs in General Merchanting.
Adjusting items include an impairment of £246m against the goodwill in Wickes given the challenging DIY market, and reorganisation costs in the P&H and Wickes businesses.
Interim dividend unchanged at 15.5p per share
Strong focus on costs given mixed market outlook, with 2018 Group EBITA anticipated to be in the lower half of the range of analyst expectations.
Travis Perkins, John Carter, Chief Executive Officer said:
“Our trade focused businesses in General Merchanting, Contracts, Toolstation and Plumbing & Heating achieved good sales growth despite experiencing a volatile first half. These businesses exited the period with encouraging momentum and, supported by a continued focus on cost, they remain on track to deliver modest profit growth for the full year.
Our consumer-focused business, Wickes, has had a far more challenging period as weaker consumer spending trends, combined with a difficult competitive environment, have held back profitability. Consequently, the Wickes team is executing a significant cost reduction programme. Whilst these savings will help drive improved profitability through the second half of the year, Wickes’ profits will be lower than previously expected.
Against a backdrop of changing market conditions which are expected to continue for the foreseeable future, the Group has commenced a comprehensive review of its business, with a view to driving stronger performance and enhanced value for shareholders in the medium term.”
| £m | Note | H1 2018 | H1 2017 | Change |
| Revenue | 3,364 | 3,221 | 4.4% | |
| Like-for-like revenue growth(1) | 4.2% | 2.7% | ||
| Adjusted operating profit(1) | 16a | 179 | 190 | (5.8)% |
| Adjusted operating profit excluding property profits(1) | 162 | 183 | (11.5)% | |
| Adjusted profit before taxation(1) | 16b | 167 | 175 | (4.6)% |
| Adjusted earnings per share(1) | 8b | 53.5p | 55.8p | (4.1)% |
| Net debt(1) | 13 | (461) | (377) | £(84)m |
| Dividend per share (pence) | 9 | 15.5p | 15.5p | – |
| Lease adjusted ROCE(2) | 16f | 10.1% | 11.2% | (1.1)ppt |
| Adjusting items | 2 | (286) | – | |
| Operating (loss)/profit | (112) | 183 | ||
| (Loss)/Profit before taxation | (123) | 168 | ||
| Basic (loss)/earnings per share (pence) | 8a | (59.8)p | 53.6p |
(1) Alternative performance measures are used to provide a guide to underlying performance and details of the calculations can be found in the notes listed
(2) Lease adjusted ROCE restated for H1 2017 to adjust for the £246m write off of goodwill in Wickes in H1 2018
