Travis Perkins bucks 'challenging market' with modest Q3 sales growth

Travis Perkins saw total Group sales grow 3.5% in Q3, with like-for-like sales growth of 4.1%, partly benefiting from a relatively weak comparable in 2016.

Sales price inflation across the Group in Q3 was 3.9%, (3.4% YTD), reflecting pass through of cost price inflation driven by foreign currency movements since June 2016 and recent increases in commodity prices, particularly in timber, copper and some specialist insulation materials.

TP's combined Merchanting divisions (General Merchanting, Plumbing & Heating and Contracts) delivered like-for-like sales growth of 4.7% and total sales growth of 2.9%.

General Merchanting like-for-like sales grew by 2.4%. In the period, the heavyside range centre network was extended to support all Travis Perkins branches in England and Wales, with this market-leading proposition now available to a significantly larger customer base.

Consumer division: Wickes and Toolstation

Like-for-like growth in the Consumer division slowed in Q3 to 2.4%, primarily due to more subdued  growth in Wickes reflecting very strong comparatives from Q3 2016 and an increasingly difficult market environment. The roll out of the Toolstation network in the UK and the Netherlands continued, demonstrating "excellent like-for-like and overall sales growth".

The Group continues to make both capital and operating cost investments to enhance its propositions to better serve its customers. Work continued in the third quarter to build the future ERP platform for the merchant businesses, and to enhance digital capabilities across the Group. The step-up in operating costs associated with these investments will deliver a long-term competitive advantage and position the Group to outperform its markets. The Group remains cautious on the market outlook and continues to carefully manage its underlying cost base. Despite these headwinds the Group remains on track to achieve full year expectations.

"Backdrop of cost inflation and market volatility"

John Carter, Chief Executive, commented: "We have delivered a good like-for-like sales performance across the Group in the third quarter against a challenging market backdrop of input cost inflation and market volatility. Volumes were broadly flat with inflation driven price increases the main component of our like-for-like growth. Whilst it is relatively early days in the transformation plan, it is encouraging to see positive progress in the Plumbing & Heating division.

"Trading conditions in our markets continue to be mixed, with consumer discretionary spending under pressure from rising inflation and on-going uncertainty in the UK economy. We maintain our confidence in the long-term fundamental drivers of our markets, and this underpins our plan to invest in our businesses to improve our customer propositions and extend our competitive advantage."