Travis Perkins has detailed its plans to demerge DIY chain Wickes as a standalone business in 2020.
The plan was outlined in the group’s interim statement of results for the six months ended June 30, where it revealed Wickes had achieved sales growth of 9.7% “after a difficult period in 2018”.
Travis Perkins’s retail division revenue, which includes Toolstation, Tile Giant and Wickes, delivered total revenues of £695 million.
According to the report, the decision to demerge Wickes is a key part of Travis Perkins’s strategy to focus on trade customers and simplify the group.
The group said it believes that Wickes, under a management team led by chief executive David Wood, is “well positioned to thrive as a standalone business” and that – as a separate business – Wickes will “have the autonomy to execute on its strategy and allocate capital to its customer proposition and growth opportunities with a clearer focus”.
The news follows speculation after the capital markets event last December that the company was looking to sell its plumbing and heating divisions in order to focus on trade customers.
Chief executive John Carter commented: “I’m delighted with the progress the group has made in executing the strategy set out at the capital markets event in December 2018; to focus on our advantaged trade businesses and to simplify the group. The P&H [plumbing and heating] sales process is well underway, and we are today announcing our intention to demerge Wickes as a separate business.
“This strategic progress has been underpinned by a strong trading period in the first half of 2019 albeit against softer trading conditions in H1 2018. Our trade merchanting businesses have outperformed their markets, through continued focus on delivering excellent customer service, and benefiting from the leaner, lower cost organisation now in place.
“Wickes has delivered a strong turnaround in volume and profit performance, with gains in both core DIY and through the kitchen and bathroom showroom. Whilst our underlying markets remain subdued, the self-help initiatives underway are supporting an encouraging improvement in performance and provide a strong platform to drive sustainable growth ahead of our markets in the medium term. Despite a cautious outlook for the near-term, the group remains confident in making progress across the year as a whole.”
First-half revenues for the group were £2.77 billion (up from £2.59bn in 2018) with operating profits of £195 million (£156m in 2018).