Thursday, July 16, 2020

Travis Perkins pauses demerger with Wickes in wake of COVID-19

In response to COVID-19, Northampton-based Travis Perkins has paused its demerger with Wickes and will suspend its proposed full-year 2019 dividend.

In its ‘COVID-19 update’ the firm said it expects the trading environment to change “quickly and materially in the coming weeks,” and is taking “prudent decisions in order to successfully navigate this period of turmoil.” These include the suspension of the proposed full-year 2019 dividend and the pausing of the Wickes demerger process in light of current extreme stock market volatility.

The Group’s trading performance in 2020 has been in line with expectations, with “solid trading in the Merchanting businesses and a strong start in Toolstation and Wickes.” Total Group sales grew by 2.4% year-to-date, and recent trading has not yet shown a significant sales impact as a result of COVID-19.

The company said: “Should the Group experience a reduction in sales volume, either from enforced store closures or a wider reduction in economic and market activity, plans are in place to balance the protection of profitability and preservation of operating cash flow with the long-term needs of the business. Actions include reducing operating costs where sensible to do so, a robust assessment of all capital expenditure requirements, and careful management of inventory and other working capital. The Group will make use of tax relief and other Government measures as they become available.”

Nick Roberts, CEO, said: “Our highest priority is the health and safety of our colleagues, customers, suppliers and all other stakeholders, and we have taken decisive action to mitigate the risks we are facing as a business, and implementing contingency plans across the Group.

“We are absolutely committed to fulfilling the essential role we play in the UK construction industry supply chain in keeping the UK dry, warm, maintained and operational; providing materials, working capital funding and support for our trade customers, large and small.

“Whilst there is unprecedented uncertainty on how the virus outbreak will directly impact our markets and our businesses, we enter this period from a position of strength and security, with a strong balance sheet and access to significant committed liquidity.”

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