Strong RMI Boosts Travis Perkins Sales Growth Even as Prices Rise

IN THE FIRST trading update of its year, Travis Perkins reports a positive start to 2021 driven by strong RMI demand. Group sales, excluding Wickes, rose 17.4% on last year and 11.8% on a 2 year like-for-like basis.

The sales growth comes even as the merchant reports ongoing price rise and hampered product availability.

Continuing Momentum

The company reports that the momentum in the Group’s end markets, experienced in the second half of 2020, has continued into the current year. Revenue was boosted by the retention of sales from the branch closure programme conducted last summer and the lapping of figures including the start of the first national lockdown in March 2020.

Nick Roberts, Chief Executive, commented: “We are encouraged by the robustness of the RMI market and the continued recovery in our other key end markets. However, at this early stage in the year, our expectations remain unchanged as we continue to make progress on the delivery of our longer-term strategic plans.”

RMI Remaining Buoyant

Throughout January and February, the Group’s businesses saw a continuation of the trends from 2020. During March, however, there was a marked step up in activity with pent-up demand and continued high levels of housing transactions fuelling higher RMI spend. In contrast, the new build housing and commercial sectors remain subdued, although the businesses with exposure to the “early cycle” trades are seeing the first signs of improvement, the company says.

Travis Perkins reports like-for-like sales in the Merchanting segment up by 6.3% on 2019, supported by retained sales from 2020 branch closures. On a total sales basis, Merchanting sales dropped by (2.6)% on Q1 2019 reflecting the overall reduced network capacity.

Toolstation’s growth continued, driven by online sales, with plans to open 60 new branches in the UK in 2021, and expansion in Europe.

The Plumbing & Heating business continued the positive momentum seen in the second half of last year with two year like-for-like sales up 9.1%. Like the Merchanting business, P&H saw strength in its smaller, RMI focused customer base, with the large contract segment slower to recover.

Price Increases and Shortages

The Group reports an increasingly inflationary environment, over and above that seen in the second half of 2020. Prices on certain raw material categories, such as timber, copper and steel increased significantly. At this stage, however, the business says cost price inflation remains manageable. The Group says it has seen shortages on some lightside products imported from Asia, as well as some key heavyside products moving onto allocation.

In the 13 weeks to 27 March 2021 since the demerging process of Wickes began, like-for-like sales were 19.7% in Q1, 25.6% ahead on a two year basis. Performance was driven by Wickes digital capability, with continued high participation of customer delivery and click and collect fulfilment.

With ‘do-it-for-me’ (DIFM) showrooms remaining closed in the first three months of 2021, which included the key winter sale period, Q1 sales declined by (25.0)%, and orders through the winter sale period were down by around (50)%.