UK: Travis Perkins to outperform expectations in challenging market conditions

Travis Perkins, the general mixed merchant, showed encouraging like-for-like growth of 2% and market share gains, particularly in heavyside categories. The specialist merchants delivered more modest growth, primarily driven by price rises, although the continued supply restrictions on plasterboard materials in CCF has put pressure on sales volumes.  The Toolstation UK business saw “excellent growth”. Allied to this, the group has acquired a controlling share of Toolstation Europe. Like-for-like merchanting sale growth was 1.6% during Q3, with year-to-date sales up 4.7%. Toolstation, meanwhile, saw 15.4% in Q3 and 16.6% year-to-date. Chief Executive Nick Roberts said: “Now in my third month since taking over as CEO of the Group, I have spent a considerable amount of time in our branches, learning about our businesses and our markets from colleagues, customers and suppliers. The Retail segment achieved like-for-like sales growth of 9.7%, with total sales growth of 8.3%. The strong performance of Wickes continued in Q3, with further market share gains in the Home Improvement market through core DIY categories and in the Kitchen & Bathroom showroom.

 

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UK: Mixed results for Kingfisher

In the UK and Ireland, B&Q total sales dropped 3.3% to £1,773m in H1, impacted by the axing of installation services and declines across showroom and weather-related categories. Kingfisher reported a number of exceptional items for the half year ended 31 July, including a £68m restructuring charge relating to redundancy costs following the group’s plans to close 11 stores in France and 19 Screwfix Germany outlets. The retailer described financial performance in the half as “mixed”. Screwfix, Poland and Romania delivered like-for-like sales growth for the period. However, sales at B&Q and Castorama France, were disappointing, with the retail group attributing declines to “a weak consumer backdrop in the UK and disruption caused by new range implementation”, alongside ongoing transformation-related issues at Castorama France. B&Q like-for-like (LFL) sales declined by 3.2% in H1.

Online was a more positive story, as B&Q’s total digital sales continued to make good progress, with sales growing by 10% and now representing 5% of total sales. The retailer also recorded a £1 million profit in the period on the disposal of properties in the UK.

Screwfix grew total sales by 9.9% (+5.1% LFL) to £882m, driven by specialist trade desks exclusive to plumbers and electricians, strong digital growth of 18% (now accounting for 32% of total sales); and the continued roll out of new outlets. The retailer opened 16 new Screwfix outlets in H1 19/20, taking its estate to 643. The company’s longer-term target is to operate around 800 outlets in the UK, and the business said it remains “on track” to open stores in the Republic of Ireland in the second half of the year in order to complement its existing online presence. Total sales for the Kingfisher Group were down 0.9% in constant currency.

 

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UK: Screwfix opens two new stores in one day

The UK omni-channel retailer Screwfix is ploughing ahead with expansion plans, opening trade counters in both High Wycombe and Northallerton on the same day earlier this month. The two new units join Screwfix’s network of more than 640 stores nationwide and form part of the Kingfisher-owned chain’s plan to have more than 97% of the UK population within a 30-minute drive of one of its stores. The business is set on rapid expansion and, just last month, Screwfix opened four new branches, with three officially opening their doors on the same day on July 18.

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UK: Travis Perkins announces Wickes demerger

At the capital markets event in December 2018, the Group announced the intention to strengthen the performance of Wickes and to capitalise on its clear competitive advantages in the DIY, small trade and kitchen and bathroom markets. At the same time the Board committed to review the options for maximising the value of Wickes in the medium term. Since the capital markets update, the group has said good progress has been made in strengthening Wickes trading performance and steps have been taken to provide Wickes with greater autonomy from the Travis Perkins group through the separation of its systems and processes. After reviewing the options, the Board has determined to demerge Wickes to shareholders as a standalone business. The demerger of Wickes is a key component of the overall Travis Perkins strategy to focus on trade customers and to simplify the Group which the Board believes will underpin the creation of enhanced value for shareholders. It is expected to complete in H1 2020.

 

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UK: Four new Screwfix outlets

The Kingfisher-owned chain Screwfix is set to open four new branches this month, with three officially opening their doors on 18 July. The new sites are all located in southern England in Wiltshire, Bristol, Kent and Warwickshire. Screwfix has said it is “confident” it has chosen great locations for all of the new sites. Screwfix reported a sales uplift of 9.6% in Q1 with LFL at +4.5% and four new outlets opening in the UK between January and April 2019, adding to its growing network of over 620 stores nationwide. Since then, the business has opened a further two sites, in Linlithgow and Towcester.

 

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