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Wed June 23 2021

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Travis Perkins returns to profit despite IT woes

3 Mar 20 Builders’ merchant group Travis Perkins returned to profit in 2019 despite its restructure still being work in progress and more than £120m being written off for an IT system that was scrapped before it got off the ground.

For the year to 31st December 2019 Travis Perkins generated revenue up 3% to £6,956m (2018: £6,741m) and made a pre-tax profit of £122.8m in 2019.

This was after a pre-tax loss of £49.4m in 2018 after writing off £387m on restructuring and impairment charges.

The 2019 profit figure includes £200m of impairments, including £107m on IT due to a failed attempt to introduce a new ERP (enterprise resource planning) system for the merchanting business.

Overall, adjusted operating profits grew to £442m, an increase of 7.8%, which was described by the board as “a positive trading performance against a challenging market backdrop”.

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The Merchant businesses, the Toolstation shops and Wickes stores all improved. By June Wickes will be a separate listed company then the planned de-merger completes.

Chief executive Nick Roberts said: "Against a challenging market backdrop we have delivered a strong operational and financial performance across the group. Our merchanting businesses gained market share as a result of a range of initiatives to improve our customer proposition, including increased local empowerment for our branch managers, while the pace of the Toolstation expansion accelerated. The actions put in place to improve our Wickes and Plumbing & Heating businesses meant that both recovered well during the year and made positive contributions towards the Group's overall performance.

"Our strategic progress in 2019 has been significant, but there remains much work to do in order to build stronger foundations for the group to deliver enhanced returns and long-term growth. Our immediate priorities are the regeneration of the Travis Perkins general merchant, continued growth of Toolstation, further simplification of our business and successful delivery of the demerger of Wickes.

"The long-term fundamental drivers of the group's end-markets remain strong, and our businesses enjoy leading positions in their respective markets. Whilst trading conditions in 2019 have been challenging we have seen some green shoots of recovery in our lead indicators, although it remains too early to point towards any tangible improvement in RMI. The group remains focused on delivering against our key priorities, and we are optimistic that we can build on the positive performance in 2019, continue to outperform our end-markets and deliver improved returns for our shareholders."

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