Travis Perkins plc (LON:TPK), a leading partner to the construction industry, has announced its unaudited full year results for the year to 31 December 2023
Protecting market position in challenging conditions
- Progressive downturn in new build housing and private domestic RMI markets leading to Group revenue (2.7)% lower than prior year
- Combination of lower volumes, overhead cost inflation and rapid commodity price deflation in H2 resulted in full year adjusted operating profit of £180m (2022: £295m)
- Invested to protect and build market positions with market share gains in both Toolstation and Travis Perkins General Merchant
Transforming the operating model to build a stronger business
- Step change reduction in non-branch cost base delivered with £35m annualised savings
- Working on a plan for a potential exit of Toolstation France; strategic review of options for Toolstation Benelux
- Optimising Benchmarx branch network with focus on integrated offer within destination General Merchant branches and profitable standalones
- Continued rationalisation of legacy Toolstation UK supply chain, following successful opening of the new Pineham distribution centre
- Delivering profit enhancements through simplification of Group structures, lowering supply chain costs and harnessing benefits from new technology
- Operating profit of £110m (2022: £285m) reflects trading performance and adjusting items of £60m recognised in 2023 (of which around £16m is cash) related to impairments in Toolstation France and Benchmarx, together with restructuring actions
Enhancing cash generation to support future capital allocation
- Reduced capital expenditure requirements in near term; £80m guidance for 2024
- Review of working capital opportunities underway
- Refinancing completed, supporting robust balance sheet; no funding maturities before 2026
- In line with the Board’s policy, 2023 proposed full year dividend of 18.0 pence per share (2022: 39.0 pence per share)
| £m (unless otherwise stated) | Note | 2023 | 2022 | Change |
| Revenue | 6 | 4,862 | 4,995 | (2.7)% |
| Adjusted operating profit¹ | 7 | 180 | 295 | (39.0)% |
| Adjusted earnings per share¹ | 14b | 45.7p | 94.6p | (51.7)% |
| Return on capital employed¹ | 17 | 6.3% | 10.8% | (4.5)ppt |
| Net debt / adjusted EBITDA¹ | 18 | 2.6x | 1.8x | (0.8)x |
| Ordinary dividend per share | 13 | 18.0p | 39.0p | (53.8)% |
| Operating profit | 7 | 110 | 285 | (61.4)% |
| Profit after tax | 38 | 192 | (80.2)% | |
| Basic earnings per share | 18.1p | 90.8p | (80.1)% |
(1) Alternative performance measures are used to describe the Group’s performance. Details of calculations can be found in the notes listed.
Nick Roberts, Chief Executive Officer, commented:
“Ongoing economic challenges have significantly impacted our trading performance, driven by weakness in the new build housing and domestic RMI sectors, and compounded by deflationary pressures on commodity products. Faced with these challenges, we have invested to protect and build our leading market positions.
With market conditions expected to remain a headwind through 2024, the business is fully focused on improving profitability and enhancing cash generation. We have successfully acted to optimise our cost base and are actively addressing the impact of our loss-making businesses. We are also accelerating changes to our operating model, leveraging our scale to create a simpler, more efficient business. This will be achieved by simplifying our operational structures, consolidating our supply chain, creating shared procurement capability, and embedding new technology.
While the timing of recovery in our end markets is uncertain, the long-term growth drivers of our industry remain robust. The proactive steps we are taking to rebuild profitability and strengthen our balance sheet will create a more resilient business and, together with our strong customer relationships and differentiated offer, will see the Group well positioned to emerge stronger when markets recover.”
Analyst Presentation
Management are hosting a results presentation at 8.15am. For details of the event please contact the Travis Perkins Investor Relations team as below. The presentation will also be available via a listen-only webcast – please register at the following link:
https://travis-perkins-2023-full-year-results.open-exchange.net/
