Travis Perkins: Travis Perkins plc - COVID-19 and Trading update
Travis Perkins plc - COVID-19 and Trading update
"In light of the COVID-19 emergency, we have established a new operating model that has kept colleagues and customers safe, operating within Government guidelines, and enabling branches across all of the Group's businesses to remain open. Moreover, we have provided essential services and support to keep the nation's critical infrastructure maintained and operational and the
"We continue to adapt our operations, applying stringent social distancing and using technology to enable contactless operations, and we are therefore able to respond to the Government's call to ensure that the construction industry can continue to deliver on crucial programmes and projects and be an engine for future economic recovery.
"As we move forward we will continue to adjust our operations, with our foremost priority to keep colleagues and customers safe and the industry supplied with the materials it needs."
The AGM will take place at
Business operations and trading
Since late March, the Group has been running a "service-light" operating model, focusing on serving customers through remote, non-contact channels.
Throughout the early weeks of the lockdown, around a third of our total Merchanting branches and around half of all
In the first three weeks of April, operating through the service-light model, Group total revenue was approximately one-third of the same period in 2019 on a comparable basis.
In recent weeks, the Group has been working closely with customers, suppliers, trade bodies and the
Since 20 April, the Group has been carefully opening more of its Merchant branch network, with branches continuing to operate the service-light, non-contact operating model. This will give greater support to large construction firms and subcontractors as they restart construction sites, and give smaller, local trade customers improved access to products. Revenue performance in Wickes and
Cost base mitigations
Actions have been taken to reduce and carefully manage the operating cost base of the Group, with all businesses taking decisive actions to eliminate discretionary spend. In addition, the Group has accessed the Government support schemes which have been put in place.
The closure of branches, particularly across the Merchanting businesses, has led to the furlough of both front line branch teams and colleagues in support functions. Altogether around half of the Group's 30,000 colleagues were furloughed for the first three weeks of the lockdown. Colleagues have been furloughed on full pay, with leadership teams and remaining colleagues working hard to sustain high levels of communication to maintain team cohesion and morale.
In addition, a decision was taken and announced internally on
The Group is benefitting from the business rates holiday, a saving of around
The Group continues to act to reduce cash commitments in order to conserve liquidity in the short-term, including benefiting from the deferral of VAT payments. Discussions have been held with landlords across the businesses to move the timing of rent payments where possible, including moving rental payments from quarterly in advance to monthly in arrears.
A rigorous review of capital expenditure has been carried out, with discretionary capex not already committed being postponed until there is a greater degree of certainty around any future economic recovery. Maintenance capex, which is primarily focused on the Group's vehicle fleet, has been curtailed in line with the drop in revenue and delivered sales.
Overall, the combination of current trading levels and the mitigations taken to control the overhead cost base means that for the first month of lockdown the Group experienced an overhead cash outflow of around
Robust financial position maintained
The Group continues to maintain a strong liquidity headroom position with a robust balance sheet.
The Group has carried out detailed scenario analysis of liquidity headroom with the key focus being near-term working capital management, and specifically on the recovery of trade debtor values from customers. Collections to date have been encouraging and are further supported by the progressive opening of additional Merchanting branches. With the
The Group has adapted its business operations at pace, working with industry and Government to design and implement safe ways of working and accelerating the use of technology for improved customer convenience, and greater flexibility and simplicity. These actions have positioned the Group well to support customers across the wider construction industry as a critical economic engine for growth.
Given the ongoing, considerable level of uncertainty, the Group is unable to provide an accurate assessment on trading and withdrew market guidance on
As reported in our statement on 20 March, the Group delivered a good performance in the first two and a half months of 2020, continuing the positive momentum from 2019. Performance was then significantly impacted by the COVID-19 pandemic and the lockdown measures introduced in the
(1) Like-for-like sales growth for the three month period ended
(2) Wickes like-for-like and total sales growth for the 13 week period ended
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