Travis Perkins revenue declined by 4.4% in the first half

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Travis Perkins revenue declined by 4.4% in the first half

Travis Perkins plc has reported today on the six months ended 30 June. Weak demand plus price deflation led to a revenue decline of 4.4% versus 2023, and Operating profit declined by 33% compared to last year at £75m. The merchanting businesses saw sales decline by -5.8% year on year, whilst Toolstation sales increased by 0.7%. Eight new Toolstation stores opened in the half year whilst 44 branches closed across the merchant estate.The Group reported:

  • Continuation of trends from H2 2023 with weak demand across the Group’s end markets and commodity price deflation leading to revenue (4.4)% lower than prior year
  • Lower volumes and the impact of price deflation on Merchanting gross margin resulted in adjusted operating profit of £75m (2023: £112m)
  • Maintained market share and pricing discipline in Merchanting as focus remains on meeting customers’ needs in tough trading conditions
  • Continued market share gains in Toolstation UK with operating margin up 130bps
  • Adjusting items of £32m recognised in the first half (of which £10m is cash) resulted in statutory operating profit of £38m (2023: £107m)
  • Full year adjusted operating profit expected to be around £150m inclusive of £(16)m of losses related to Toolstation France
  • Interim dividend of 5.5 pence per share (2023: 12.5 pence per share)
  • A simpler, more efficient business: restructuring actions and tighter controls have reduced overheads by £19m versus prior year with cost inflation absorbed. The Group is leveraging scale to deliver future savings in distribution and procurement.
  • Addressing loss-making activities: on track to exit Toolstation France by the end of the year; strategic review of Toolstation Benelux complete with actions in place to deliver break-even performance in 2025
  • Technology enablement: Oracle Finance ERP system went live 1 July 2024
  • Enhanced cash generation: greater financial and operational discipline, including lower capital expenditure, resulted in a cash inflow in H1 of £82m and a reduction of £81m in net debt before leases. Working capital inflow of £54m driven largely by stock reduction; targeting further reduction in H2
  • New leadership to continue to drive the transformation of the Group’s operating model
  • New CEO Pete Redfern and new Chair designate Geoff Drabble to join the Group in September and October respectively. Both will bring extensive construction sector experience and listed company expertise.

Toolstation

Travis Perkins Merchanting

Nick Roberts, Chief Executive Officer, commented:“Trading conditions have remained challenging through the first half of the year and we have continued to prioritise delivering for our customers whilst also recognising that a persistently lower volume environment means that we have to deliver a simpler, more efficient business. Whilst market conditions have impacted on our trading margin, we have made good progress on managing our overhead base and generating cash. With a new government quickly setting out its plans to reform planning to deliver more housing and infrastructure, and the expectation of an easing in macroeconomic conditions, the Group is focused on ensuring that it is well placed to maximise the benefits from both a future recovery in demand and the long term requirement for the UK to expand and decarbonise its housing stock.”

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