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Unaudited accounts for the year to 31st December 2023 show that Travis Perkins plc made a pre-tax profit of £70m, compared to £245m in 2022. Revenue was down just 3% at £4,862m (2022: £4,995m).
Roughly 20% of Travis Perkins revenue comes from Toolstation and in the UK it has been growing market share with the opening of 163 new Toolstation branches between 2020 and 2022. In 2023, just seven new stores (net) were added
However, in mainland Europe, where it has more than 100 stores across France, Netherlands and Belgium, it has not been doing so well.
Toolstation is quitting France and reviewing its continued presence in Netherlands and Belgium.
Toolstation France grew sales by 29% in 2023 but losses increased to £18m as six new stores were added alongside. It is expected to lose a further £20m this year. “Management has concluded that the investment required to reach profitability is no longer sustainable and today confirms that it is working on a plan for a potential exit of the business,” the board said.
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Travis Perkins’ 2023 results include a £33m impairment charge for Toolstation France.
Toolstation Benelux also grew turnover, by 11%, but losses climbed from £15m to £19m. Management expects losses to narrow to around £12m in 2024 in Benelux and now anticipates that the Netherlands business will reach break-even by 2025 with Belgium forecast to break-even by 2028.
Travis Perkins chief executive Nick Roberts said: “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.”
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