Posted 4th March

Travis Perkins sees profits drop as Wickes takes hit

4th March 2019 - 15:20pm
money matters, travis perkins, wickes, financial, report, trading, update, kbb, diy, market, kbbdaily

Travis Perkins – the owner of Wickes, Primaflow F&P, Benchmarx and Toolstation – has seen a 1.3% decline in adjusted operating profit for the 2018 financial year as its consumer DIY brand Wickes reported a 4.4% like-for-like decrease in revenue.

According to the group, the UK DIY market environment was “extremely challenging” thanks to declining consumer confidence and competitive pricing pressure. Travis Perkins added that the first half of 2018 was particularly difficult due to poor weather conditions affecting Easter trading.

Kitchen and bathroom showroom sales were “hard hit” in the first half of 2018 in response to a “poor promotional period” in Q4 2017 as well as a challenging retail environment. Wickes saw a 19% drop in adjusted operating profit, split between a 39% decline in H1 and 15% growth in H2.

Delivered kitchen and bathroom sales declined by 10% in the first half of 2018, Travis Perkins noted, but improved promotional activity in Wickes helped strengthen leads in H2 2018, alongside the fact that competitor B&Q exited the kitchen installation service for consumers.

Travis Perkins’ Toolstation UK brand for the trade saw revenues rise by 11.4% on a like-for-like basis in 2018, with adjusted operating profit “broadly flat year-on-year as anticipated”.

“The group delivered a solid performance overall in 2018 despite a challenging market backdrop,” said CEO John Carter. “We took concerted self-help actions during the year, and the benefits of this cost reduction, together with improved trading, drove an improved profit performance in the second half of the year.”

The company previously announced that it is looking to sell its plumbing and heating division to simplify the business and focus its efforts more on “strengthening the performance of Wickes”.

Carter said: “We are making good progress on the preparation for the disposal of the plumbing and heating division, and are seeing an encouraging improvement in trading and good momentum in Wickes.”

He added: “Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term. The group remains focused on self-help actions to underpin performance in the near term, whilst continuing to invest for the future.”

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