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Half-Year Revenue Down At Travis Perkins PLC

Flickr - Travis Perkins bags 51263993428_1f378af300_o

Travis Perkins plc, a leading partner to the construction industry, announces its half year results for the six months ended 30 June 2023 

Focused on balancing near-term trading performance with long-term strategic delivery in challenging market conditions 

Financial Highlights

  • Revenue of £2,472m down (2.5)% and adjusted operating profit of £112m down (31)% reflecting weak market volumes in private domestic RMI and new build housing

  • Adjusted earnings per share of 30.5p down (41)% resulting from lower trading profit, phasing of property profits and the increase in the UK corporation tax rate

  • Strong cash conversion at 105% driven by tight working capital management

  • Lease-adjusted leverage (net debt / EBITDA) of 2.1x due to lower earnings and increased lease commitments. Net debt before leases reduced by £32m during the half.

  • Interim dividend maintained at 12.5 pence per share reflecting the Group’s robust balance sheet and confidence in the medium term outlook

  • As previously guided, full year adjusted operating profit expected to be around £240m 

Operational Highlights

  • Merchanting saw resilient demand across commercial, industrial, infrastructure and public sector markets. However, performance was impacted by significant weakness in new build housing and private domestic RMI markets with revenue down (4.5)% overall and operating profit (23.5)% lower due to high operational gearing.

  • Toolstation delivered market share gains, with revenue up 9.0%, driven by network maturity benefits and focus on enhancing the trade customer proposition. Operating profit was broadly in line with prior year reflecting investment in network and infrastructure to support future growth.

  • Toolstation UK’s new partly-automated 500,000 ft2 distribution centre in Pineham, Northamptonshire, which will drive long term operational efficiencies, is on track to open in Q3. The Group will be holding an investor event, focused on Toolstation UK, at Pineham on 28 September 2023.

  • Proactive cost actions and continued cost discipline ensured that overhead inflation was mitigated

  • Further progress on building a sustainable business with primary focus on decarbonisation 

£m (unless otherwise stated)


H1 2023

H1 2022







Adjusted operating profit[1]





Adjusted earnings per share1





Adjusted ROCE excluding property profits1





Net debt before leases[2]





Net debt / adjusted EBITDA1





Ordinary dividend per share




Operating profit





Total profit after tax





Basic earnings per share





Segmental performance



H1 2023

H1 2022






Adjusted operating profit*




Adjusted operating margin*




ROCE (12 month rolling)*




Branch network**




* Excluding property profits

** 2022 branch network figures for comparison are taken at 31 December 2022

The Merchanting segment was impacted by reduced demand in the new build housing and private domestic RMI markets with revenue down by (4.5)% and operating profit down (23.5)% to £130m.  Price inflation in the half was still elevated compared to the long-run average but has moderated through the period as prior year increases have rolled off and the Merchant businesses have seen deflation on commodity products, primarily on timber.

Merchanting gross margin was solid and cost actions mitigated inflationary overhead increases during the first half. However, operating margin reduced by (160)bps due to the impact of lower volumes on a predominantly fixed cost base.

The Private domestic RMI market (~35% of Merchanting revenue) remained challenging throughout the half with notably fewer secondary housing transactions and homeowners’ budgets squeezed by inflation and rising mortgage costs. Whilst the General Merchant experienced resilient demand across larger contractors and developers, the professional trade and general builder segment was weaker.

The General Merchant team are relentlessly focused on demonstrating the value and convenience of the customer proposition for this key segment. This targeted approach, combining data on customer behaviour with local insight, will involve sharper focus on gateway categories, such as timber, and working closely with our suppliers to bring the best deals to our customers through our omni-channel offer.

The private domestic new-build market (~19% of Merchanting revenue) saw substantial volume decline as the impact of rapidly rising mortgage rates quickly reduced new housing starts. This was more pronounced amongst the national housebuilders, with regional housebuilders remaining more active, but the impact was nonetheless significant on CCF, Keyline and Staircraft.

Despite these challenges, CCF was able to deliver a resilient performance with revenue growth driven by disciplined pass through of manufacturer price increases, whilst Staircraft saw good profit growth resulting from improvements in margin management. Staircraft is investing in a new c. 170,000 ft2 facility in Coventry to enable the business to significantly increase capacity with the first output from the new factory expected in the first half of 2024.

The commercial and industrial market (~22% of Merchanting revenue) saw continued solid demand in the first half which enabled BSS to deliver a robust performance. TF Solutions continues to gain market share with two new branches added and revenue up 28%.

The public sector market (~24% of Merchanting revenue) remains strong with a pipeline of well-funded projects across the infrastructure segment and a large backlog of work on social housing and public assets. This strength is reflected in the performance of the Group’s Managed Services business, with revenue increasing by 7% in the first half, and has helped Keyline to partially offset the impact of notably lower new housing starts.

The Group’s strategy of developing value-added services, enabled by destination branches in the General Merchant, continues to progress well. Alongside Managed Services, Hire is also performing strongly with revenue growth of 6% in the first half and now 34% ahead of 2019. Since 2020, the Group has invested in seventeen new, expanded or relocated destination branches with these branches delivering a revenue and profit performance ahead of investment appraisal targets and significantly ahead of the 2018-19 cohort. The Group continues to invest in the future pipeline with six more sites due to open in the second half including Tamworth, Cambridge and Epsom.



H1 2023

H1 2022






Like-for-like growth




Adjusted operating profit*




Adjusted operating margin*




ROCE (12-month rolling)*




Branch network (UK)**




Branch network (Europe)**




* Excluding property profits

** 2022 branch network figures for comparison are taken at 31 December 2022





UK adjusted operating profit




Toolstation delivered a solid performance in the first half with revenue growth of 9.0% as the business continued to gain market share across both the UK and Europe driven by network maturity benefits and further enhancements to the trade customer proposition. UK revenue increased by 7.7%, with like-for-like sales up 5.4%, while the European business increased revenue by 19.2%.

In the UK, operating profit improved to £9m although operating margin remains around 3%, reflecting both the recent significant investment in the network and infrastructure alongside c. £7m of costs in the period related to the dual running and start-up of the new c. 500,000 ft2 partly-automated Pineham distribution centre alongside existing distribution facilities. With Pineham due to open in Q3, the Bridgwater distribution centre will close in the autumn as part of a longer-term strategy to drive distribution efficiency which, alongside the maturity benefits from the network rollout, will take the business towards a high single-digit operating margin.

Having created substantial new capacity via the opening of 163 new branches in the UK during 2020–22, the focus for 2023 is on driving growth in those immature branches alongside the delivery of the new distribution centre. The rollout of UK branches will resume in 2024.

In Europe, Toolstation also saw market share gains from the maturity of new space. In Benelux, where 5 new branches were added to take the total to 118, sales were up 9%. France saw the addition of 3 new branches, taking the total to 48 and delivered 42% sales growth.

Toolstation Europe overall made a loss of £(19)m in H1, reflecting primarily the immaturity of the branch network, which has doubled in the last 30 months, and the full impact of the second Netherlands distribution centre opened in 2022.  Losses are expected to narrow in the second half as the Netherlands progresses towards break-even point.

Toolstation investor update

The Group will be holding an update for investors and sell-side analysts on 28 September 2023 at the new Toolstation distribution centre in Pineham, Northamptonshire. The event will be focused on Toolstation UK and will provide an opportunity to meet with the new UK management team.

Central costs

Central costs were lower year-on-year at £17m reflecting benefits from restructuring actions at the end of 2022.

Property transactions

Property profits in the first half of £9m were primarily generated from the sale of closed or relocated properties. These profits were £12m lower than prior year which included the sale of a substantial General Merchant site in central Cambridge. In addition to these individual site sales, a sale-and-leaseback package of seven sites was completed in April 2023, generating £23m of proceeds at a yield below 6%. Property profits for the full year are expected to be £15–20m.

Quarterly revenue analysis



Total Revenue

Like-for-like revenue







































Total Group
















Note – there was one extra trading day in both Q1 and H1 2023 compared to 2022 in the Merchanting segment

At a Group level, like-for-like sales were similar in both the first and second quarters. In the Merchanting business like-for-like sales weakened slightly into Q2 as the moderation in pricing was not fully offset by improving volume trends. Total sales in Merchanting in Q2 were lower than like-for-like sales by (0.4)% due to the impact of branch closures at the end of 2022. This impact was masked in Q1 by the extra trading day.

Toolstation saw an acceleration of like-for-like sales growth into the second quarter, demonstrating the momentum in the business. Total revenue was 3.1% higher than like-for-like revenue in the half, reflecting the impact of new space in both the UK and Europe.

Nick Roberts, Chief Executive Officer, commented:

“Market conditions have been challenging, which is reflected in both our first half performance and our outlook for the balance of the year. The Group remains focused on striking the appropriate balance between seeking to protect shorter term profitability, delivering our strategic objectives and being well placed to benefit when market conditions improve.

Given the market backdrop, we are relentlessly focused on meeting our customers’ needs in core categories and supporting our local branch managers to grow share of wallet, particularly with general builder and professional trade customers, by making it simpler and easier to transact with us through our digital channels and in our branches.

I am pleased with the continued progress we are making on the development of value-added services, as shown in the growth of Managed Services and Hire, and also with the market share gains coming through in Toolstation.

Whilst near-term trading is expected to remain difficult, we continue to work to position the Group to benefit from the long term structural drivers in our end markets. The opportunities presented by the requirement to decarbonise the UK’s built environment and address the shortage of both private and social housing remain significant and our unique portfolio of businesses, coupled with the development of innovative solutions for our customers, will enable the Group to deliver long term growth and create value for shareholders.”

Source : Travis Perkins PLC

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01 August 2023

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