Travis Perkins has announced that performance in the first half of 2020 (H1) was significantly impacted by the Covid-19 pandemic with total profits crashing to a £113 million loss (H1 2019: £12 million) as revenue fell 20%. However, Travis Perkins says it has significantly strengthened its core and found new ways to deliver excellent service to both its trade and retail customers.
Travis Perkins made an encouraging start to 2020 with revenue growth of 2.4% in the 11 weeks to 18 March. However, as the impact of the pandemic spread to the UK and the lockdown period was implemented, overall revenue in the half declined by 20% to £2,781m and by 19% on a like-for-like basis.
Given the largely fixed cost base in the business, the revenue decline had a significant impact on the firms profitability, but the Group says the underlying performance shows an adjusted operating profit of £42m (H1 2019: £220m).
The long term fundamentals of the Group’s end markets remain robust, with ongoing demand for new housing and underinvestment in the repair, maintenance and improvement of the existing UK housing stock, however, significant uncertainty remains in the UK economy in the near term.
Nick Roberts, chief executive officer, said: “Throughout the pandemic, the health and safety of our colleagues and customers has been our primary concern. Customer interactions have changed significantly resulting in changes to the way we do business, from increased activity through digital channels through to alterations to our physical store formats in order to maintain safe working practices.
“Although our financial performance in the first half of 2020 was impacted by the Covid-19 pandemic, and we have had to undertake a restructuring programme in light of the challenging outlook for the Group’s end markets, we have made significant strategic and operational progress against the four strategic priorities we outlined at our full year results in March 2020.
“Although considerable uncertainty around the impact of the COVID-19 pandemic remains, the actions we have taken to adapt and innovate in our businesses mean that the Group is well placed to continue to service our customers, support our colleagues, outperform our markets and generate value for our shareholders.”
The Group continues to rationalise its branch network and focus on improving digital capabilities, such as click and collect sales. In the specialist merchants division activity is now leaning towards delivery of products to customers, either from branches or direct from suppliers. Fewer customer visits to branches reduces the requirement for branches.