Travis Perkins: Interim Dividend? Do It Yourself

Posted on Sep 09, 2020. by NTI

The NTI newsroom have led with a story on Travis Perkins before, when we announced widespread redundancies across the group, which contains Wickes and the saucily named Toolstation. They are at it again today (Wednesday 9 September) telling us that although business in July and August returned to equivalent levels of 2019 the recovery was worse than they had hoped, as they seek to make up ground lost during lockdown.

Aye aye, the sniffer pups in the NTI newsroom smell the early stench of a rat, as how can results be expected to be any different in these early, delicate stages of financial recovery? Similar statements from equivalent businesses have been the prelude to announcements of restructuring and further job losses. We have our eye on this one.

Someone gloomy in Travis Perkins said: Travis Perkins warned: “Significant uncertainty remains in the UK economy in the near term. There has been a recent strong recovery in secondary housing transactions [a trigger for repair and improvement spending] but it is not yet clear whether this is a sustained trend or a release of pent-up demand."

AAAAAND ...? We think.

The previously reported cost of shutting down nearly 10 per cent of the business, 165 outlet closures and 2,500 redundancies, sent the group deep into the red. With revenues plunging 20 per cent in the first six months to £2.78 billion, operating profits all but evaporated to £42 million from £220 million in the same period in 2019. Its commitment, delayed by the pandemic, to demerge the Wickes business into a separate standalone company cost nearly £22 million in advisors’ fees and writedowns on the estate, which has 235 outlets. Yep, restructuring is expensive.

There will be no interim dividend at Travis Perkins and we are closely watching this space.

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