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Fri March 22 2019

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Travis Perkins sinks into the red

26 Feb Builders’ merchant group Travis Perkins has posted a pre-tax loss of £49.4m for 2018 on revenues of £6.74bn.

The results were hit by £386.7m of impairment charges and write-offs as the company restructures.

There was a £252m goodwill impairment charge against the company’s retail businesses, Wickes and Tile Giant, £58.4m restructuring costs and a £45.3m one-off charge preparing the plumbing & heating division for disposal, which is expected during 2019.

As reported in December, the future of the retail business is also under review as part of the group restructuring, bringing the core Merchanting business, targeting trade customers, back to the fore.

Due to the changing shape of the group, there will no longer be a board-level chief operating officer role and Tony Buffin steps down from the board today and will be leaving the business. He joined Travis Perkins as chief financial officer in April 2013, before being appointed chief operating officer in 2017.

Adjusted pre-tax profit, excluding all the impairment charges and write-offs, was up 1% to £347m.

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Chief executive John Carter said: "The group delivered a solid performance overall in 2018 despite a challenging market backdrop. We took concerted self-help actions during the year, and the benefits of this cost reduction, together with improved trading, drove an improved profit performance in the second half of the year.

“In December 2018, we set out our intention to focus on delivering best-in-class service to trade customers and to simplify the group. To that end, removing the divisional structure within Merchanting will enable an increased focus on customers at a business unit level, speed up decision making and, at the same time, reduce costs.

“In the longer term, the group remains focused on generating sustainable profitable growth for shareholders and we will achieve this by allocating capital and resources to our most advantaged businesses. We are making good progress on the preparation for the disposal of the Plumbing & Heating division, and are seeing an encouraging improvement in trading and good momentum in Wickes.

“Whilst we remain positive about the long-term outlook for our end markets, we are planning for uncertain market conditions to continue in the near term. The group remains focused on self-help actions to underpin performance in the near term, whilst continuing to invest for the future."

MPU

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