Travis Perkins’ Q3 trading update has revealed a ‘solid performance’ by the group during the period, despite ‘incrementally more challenging’ trading conditions.
Total Group sales grew by 3.8% in Q3 (3.4% like-for-like) with Toolstation posting a 15.4% like-for-like sales growth due to the acquisition of the controlling share of Toolstation Europe. The group’s merchanting businesses also showed like-for-like growth (1.6%) during the period, despite a challenging commercial construction market and pressure of sales volumes.
For the year to date, these parts of the business have continued to perform strongly, with merchanting posting 4.7% like-for-like growth and Toolstation an impressive 16.6% like-for-like. Toolstation opened 21 stores in the first six months of this year, with 60 planned for 2019 in total, according to Travis Perkins. Total Group sales for the year so far are up 4.7% like-for-like.
Chief Executive Nick Roberts, now three months into taking up his role with the Group, said of the results: “The Group delivered a solid performance in Q3, despite trading conditions becoming incrementally more challenging through the course of the summer as a result of the on-going market uncertainty. Though the Group maintains a cautious outlook for the near-term, full year performance remains in line with our expectations.”
The process to de-merge Wickes from the Travis Perkins Group is on track, with the de-merger aiming to be completed in Q2 next year. Due to current uncertainty, the Group has decided to pause the sale process of the Plumbing & Heating business for the time being.
“I am particularly impressed by the quality of our teams and their commitment to excellent customer service,” Roberts continued. “The plan to simplify the Group’s portfolio of businesses remains the right one, with good progress made through the quarter towards reducing cost and complexity and enabling greater focus and more disciplined capital allocation to our advantaged trade-focused businesses.”
The Group remains on target to achieve its planned cost reductions for the year, with actions underway to achieve £20m-£30m of annualised savings by mid-2020.