Travis Perkins: Q3 trading update (1745833)
October 11 2023 - 2:00AM
UK Regulatory
Travis Perkins (TPK)
Travis Perkins: Q3 trading update
11-Oct-2023 / 07:00 GMT/BST
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11 October 2023
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR)
Travis Perkins plc Q3 2023 trading update for the three months to 30 September 2023
Challenging market conditions persist with significant commodity product deflation impacting on margins; full year
adjusted operating profit now expected to be in the range of GBP175m to GBP195m
Business Performance
The Group has continued to experience challenging market conditions with the pronounced slowdown in new build housing
and domestic RMI activity persisting into the third quarter. As a result, Group revenue declined by (1.8)% in the
period with like-for-like sales also down (1.8)%.
Whilst third quarter trading started as expected in the Merchanting segment, September saw a notable deterioration in
market activity and sentiment. Q3 revenue was (3.4)% lower year-on-year, a modest improvement on the first half,
however the drivers of revenue have shifted markedly. Pricing declined by (3.1)%, resulting primarily from strong
deflationary pressures on commodity products which have significantly impacted on gross profit and margins, including
the impact of selling through existing stocks at lower market prices.
All merchant businesses have been focused on driving volume by delivering great service and competitive prices for
customers. This has resulted in a positive response from customers and, as a consequence, volume performance improved
to flat year-on-year in the quarter.
Toolstation continues to see good growth across both the UK and Europe, benefitting from network maturity. Toolstation
UK delivered revenue growth of 7% in the third quarter whilst Toolstation Europe saw revenue growth of 9%.
Whilst overhead inflation remains elevated, the Group remains focused on actions to minimise the impact on
profitability. Working capital and capital expenditure continue to be tightly managed to reflect near term market
conditions.
Outlook
The Group's businesses will continue to focus on meeting customers' needs on pricing and service in order to be well
positioned when market conditions improve. With commodity deflation expected to continue and the exit rate from the
third quarter indicating further challenging conditions for the balance of the year, the Group now expects to deliver
an adjusted operating profit in the range of GBP175m to GBP195m for the full year.
Nick Roberts, Chief Executive, commented:
"Market conditions remain challenging with continued weakness across new build housing and domestic RMI. Deflation on
commodity products has also been greater than we had anticipated. In this environment, our priority has been to ensure
that we deliver for our customers, both on service and pricing, as we seek to retain and grow our customer base for the
medium to long term.
This is the right approach, demonstrated by our ability to maintain volumes in this difficult market. However, this has
impacted on our trading margins and is reflected in today's revised guidance.
With a strong balance sheet and leading customer propositions, we remain confident in our future prospects and work
continues to position the Group to benefit from the long-term structural drivers across our end markets, particularly
with the need to decarbonise the built environment and to build more homes in the UK becoming ever more pressing."
Q3 2023 Merchanting Toolstation Group
Volume (0.3)% 2.5% 0.0%
Price and mix (3.1)% 4.8% (1.8)%
Total revenue growth* (3.4)% 7.3% (1.8)%
Like-for-like revenue growth (2.9)% 4.4% (1.8)%
YTD 2023 Merchanting Toolstation Group
Volume* (6.4)% 2.6% (5.3)%
Price and mix 2.4% 6.0% 3.1%
Total revenue growth* (4.0)% 8.6% (2.2)%
Like-for-like revenue growth (4.1)% 5.0% (2.7)%
* Trading day adjusted
Travis Perkins Management team will be hosting a call for
analysts and investors at 8.00am BST. Details of the call are below
with participants requested to join 10 minutes before the scheduled
start time;
Guest dial in: +44 (0) 33 0551 0200
Please quote "Travis Perkins" when prompted by the operator
The person responsible for making this announcement is Alan
Williams, Chief Financial Officer.
Enquiries:
Travis Perkins FGS Global
Matt Worster Faeth Birch / Jenny Davey / James Gray
+44 (0) 7990 088548 +44 (0) 207 251 3801
matt.worster@travisperkins.co.uk TravisPerkins@fgsglobal.com
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
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ISIN: GB00BK9RKT01
Category Code: MSCH
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
OAM Categories: 2.2. Inside information
Sequence No.: 277150
EQS News ID: 1745833
End of Announcement EQS News Service
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