Travis Perkins group has indicated it will be refocusing the business on its trade customers amidst uncertain short term market conditions.
The Group, which owns Wickes, Toolstation, Travis Perkins merchants & others, said it is looking to improve the performance of Wickes to create options to maximise value over the medium term – wording that has been interpreted by many to mean the Wickes chain of consumer & trade stores could be sold off. It has also clearly exploring the potential sale of the Plumbing & Heating division.
The announcement has come in the midst of a downturn in the DIY market, which was partially blamed for Wesfarmer’s dramatic exit from the UK DIY market earlier this year.
Longer term, Travis Perkins said business drivers remain robust – including the shortage of housing in the UK and underinvestment in maintenance and improvement of existing and ageing housing stock.
Highlighting its tradition in serving UK trade customers, Travis Perkins said that represented the majority of Group activity today, adding: “Whilst trade customers are becoming increasingly demanding of the quality of service they receive, they still place considerable value on a convenient and reliable supply relationship.”
John Carter, CEO, commented: “We have developed a clear plan to focus on delivering best-in-class service to our trade customers, and to simplify the Group to reduce complexity, speed up decision making and reduce costs. Our trade businesses hold strong positions in attractive markets, and these initiatives will enable us to concentrate our management time and capital in the highest returning areas.
“Our strong balance sheet and free cash flow generation, driven by growing earnings and lower capital expenditure, will underpin our commitment to drive shareholder value and a progressive dividend.”
The statement follows a comprehensive review of the business that started in July 2018.