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Online traders drive Travis Perkins to reorganise

2 Aug 17 Builders merchant group Travis Perkins is reorganising its plumbing businesses again after several years of underperformance in the face of online competition.

PTS – a Travis Perkins brand
PTS – a Travis Perkins brand

The overhaul will cost the business £30m to £40m over the next 12 months and result in City

Plumbing and the PTS branch network being integrated under a single management team. The branch network and online channels will be brought together and the wholesale business will increasingly operate on a standalone basis.  These changes will reduce operating costs as well as provide a more coherent customer proposition, Travis Perkins said.

A dedicated supply chain will be formed to support the P&H business, decoupled from the group infrastructure, and making better use of the primary distribution centre in Warrington.

Travis Perkins said that traditional national plumbing merchants have been under pressure from the significant expansion of online operators.

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In the first half of 2017 Travis Perkins saw its profits from plumbing and heating fall by a third. Growth in the private house-building market was not enough to offset continued declines in social housing and reduced trade with one of its largest customers.

Across the group as a whole, Travis Perkins reported 3.5% revenue growth for the first half of 2017 but a 4.5% dip in pre-tax profits.

For the six months ended 30th June 2017, Travis Perkins made £168m pre-tax profit on revenue of £3,221m, (compared with 2016 H1 profit of £176m on revenue of £3,113m).

Chief executive John Carter said: "Today we have announced a comprehensive transformation plan in our Plumbing & Heating division which is designed to stabilise performance and to create more options to maximise shareholder value. Whilst we remain cautious on the macro-economic outlook for the second half, the group remains focused on executing the clear plans it has in place which will deliver strong cash generation and maximise returns."

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