Travis Perkins Regulatory News (TPK)

16 December 2020

Travis Perkins plc - Update on Trading and Government assistance

Trading performance

Sales performance in October and November 2020

*Disposals include PF&P wholesale from the P&H segment in January, and Tile Giant from the Retail segment in September

The end market trends experienced during Q3 continued into October and November while the Group also continued to make good progress on retaining sales from branches closed as part of the restructuring activity during the summer. As a result of these factors, the Group delivered robust, like-for-like sales growth of 8.6% during the period.

There continues to be strong demand across the DIY market, resulting in particularly strong sales in Wickes and Toolstation, as well as the continued encouraging recovery in domestic RMI across smaller trade customers in Travis Perkins and City Plumbing. Volumes with larger customers continue to recover more slowly, impacting the rate of sales recovery in our specialist merchants in BSS, CCF, Keyline and the large contract side of the P&H business. Some larger customers were more impacted by the second national lockdown in November, alongside a negative impact on the kitchen and bathroom businesses as showrooms were forced to close.

Government assistance

Given the status of Wickes as an essential retailer, and Toolstation also benefiting from the surge in DIY trade during 2020, both businesses will return the business rates relief received as a result of the COVID19 crisis and repay monies received under the Government's Coronavirus Job Retention Scheme. This totals around £50m, which will correspondingly reduce the expected outturn for Group adjusted EBITA for 2020.

Cash and liquidity headroom

During November the Group raised £250m via a long five-year public bond issuance at a coupon of 3.75%. The proceeds will be used to repay the £250m September 2021 bond maturity before the end of December.

Adjusting for bond movements, at the end of November liquidity headroom, including the undrawn £400m RCF, was £988m. The strength of the Group's ongoing liquidity position has enabled the settlement during December of approximately £100m of VAT deferred from H1 2020. Taking this into account, management continues to expect covenant net debt at the year end to be similar to the 30 June 2020 position.

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