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Toolstation Delivers Solid First-Half Performance

Toolstation Image (8)

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

  • 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.

For Group results, click here

Toolstation

 

H1 2023

H1 2022

Change

Revenue

£410m

£376m

9.0%

Like-for-like growth

5.9%

(10.6)%

 

Adjusted operating profit*

£(10)m

£(8)m

(25.0)%

Adjusted operating margin*

(2.4)%

(2.2)%

(20)bps

ROCE (12-month rolling)*

(2)%

1%

(3)ppt

Branch network (UK)**

562

563

(1)

Branch network (Europe)**

166

158

8

* Excluding property profits

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

Memo:

 

 

 

UK adjusted operating profit

£9m

£7m

28.6%

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.

Source : Travis Perkins PLC

Image : Travis Perkins PLC

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01 August 2023

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