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Travis Perkins Group reports on tough 2023

Travis Perkins plc has announced its unaudited full year results for the year to 31 December 2023. They report on “A challenging year in weak market conditions; driving actions to support profit recovery and enhance cash generation”.


  • Group revenue was (2.7)% lower than prior year driven by a downturn in new build housing and private domestic RMI markets.
  • Full year adjusted operating profit dropped YoY by 37% to £180m from £295m in 2022. This was due to a “combination of lower volumes, overhead cost inflation and rapid commodity price deflation in H2”.

Summary highlights

  • Invested to protect and build market positions with market share gains in both Toolstation and Travis Perkins General Merchant
  • Transforming the operating model to build a stronger business
  • Step change reduction in non-branch cost base delivered with £35m annualised savings
  • Working on a plan for a potential exit of Toolstation France; strategic review of options for Toolstation Benelux
  • Optimising Benchmarx branch network with focus on integrated offer within destination General Merchant branches and profitable standalones
  • Continued rationalisation of legacy Toolstation UK supply chain, following successful opening of the new Pineham distribution centre
  • Delivering profit enhancements through simplification of Group structures, lowering supply chain costs and harnessing benefits from new technology
  • Operating profit of £110m (2022: £285m) reflects trading performance and adjusting items of £60m recognised in 2023 (of which around £16m is cash) related to impairments in Toolstation France and Benchmarx, together with restructuring actions
  • Enhancing cash generation to support future capital allocation
  • Reduced capital expenditure requirements in near term; £80m guidance for 2024
  • Review of working capital opportunities underway
  • Refinancing completed, supporting robust balance sheet; no funding maturities before 2026 In line with the Board’s policy, 2023 proposed full year dividend of 18.0 pence per share (2022: 39.0 pence per share)


The Merchanting segment had a challenging year with revenue down by (4.4)% and adjusted operating profit reduced by (32.5)% to £212m, reflecting the high operational gearing of the Merchant businesses. Revenue decline was consistent although the drivers moved significantly through the year with pricing starting off at elevated levels due to the rollover of 2022 increases before falling away rapidly. Deflation on commodity products, notably timber, became a major factor in the H2 with overall pricing turning negative, having been +9% in Q1. By contrast, volumes started the year weakly, driven by a reduction in new build housing activity, before levelling off in H2 as comparatives eased and actions on pricing delivered market share gains in the General Merchant.

Toolstation made good progress during the year with 6.6% sales growth demonstrating the businesses’ ability to win share in difficult markets.
In the UK, where sales grew by 5.3%, network expansion was limited in the year to a net seven new stores reflecting a combination of market outlook, significant investment in the network in recent years and management focus on the opening of the new distribution facility in Pineham, Northamptonshire. Pineham opened in Q3 with 500,000 square feet of capacity and semi-automation technology providing distribution capability as the business grows over the next decade. As a result of Pineham coming on-line, the Bridgwater distribution centre was closed in Q2 2023. A further review of the retail distribution network proposed closing the Daventry distribution centre which was announced in Q1.

UK adjusted operating profit grew by 9.5% to £23m which included around £13m of higher operating costs related to start-up and dual running costs at Pineham. Management expects to recover these costs over the next three years as supply chain efficiencies come through.

In September the Toolstation UK management team set out their vision for the future of the business at a Capital Markets Update with the ambition to grow revenue to £1bn by 2027 with operating margin increasing to around 8% through scale efficiencies and margin enhancement opportunities.

The Merchanting business saw consistently challenging trading conditions across the year, although the drivers of performance varied significantly. At the start of the year price inflation remained high, largely driven by the rollover of 2022 increases. By contrast, volumes were weak, particularly in the new house building sector following the impact of the “mini-budget” in late 2022. From May onward, a sharp decline in the price of commodity products, notably on timber, saw the
overall basket of goods move into deflation as price reductions were passed on to customers. Volumes stabilised in the second half as comparatives eased and more competitive pricing delivered market share gains in the General Merchant.

Toolstation also gained market share across the year in both the UK and Europe with volume growth despite a declining market and robust pricing. Maturity benefits from the investment in the store network and customer proposition continue to come through.


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