Travis Perkins, building merchant and DIY retail specialist group, has today reported a 37 per cent rise in profit before tax to £297 million in its latest full-year results.
The business, which operates the retailers Wickes, Toolstation & Tile Giant, also saw its group revenues grow 52 per cent in total and six per cent on a like-for-like (LFL) basis in the 12 months ending December 31st 2011, despite the depressed nature of the market.
Compared to their peak of 2007, Travis Perkins estimates that market volumes were down some 25 per cent in its retail business and -30 per cent in its trade business during the year.
Adjusted operating profit for its retail business was down £14 million annually to £45 million due to greater investment in Wickes and a LFL sales decline of 1.4 per cent, although overall revenues for the division grew £15 million thanks to store expansion.
Low consumer spending, particularly on kitchens & bathrooms, meant total volumes in retail fell by 4.3 per cent year-on-year, however a rise in inflation increased turnover by 2.9 per cent.
Geoff Cooper, CEO of Travis Perkins, commented: “2011 was a good year for Travis Perkins. Despite a depressed construction market, we improved services to customers… continued to outperform our markets, and won further market share.
“This meant we achieved a good set of financial results with improvements in all key figures.”
During the year the group completed the full integration of recently acquired plumbing services network BSS, took full control of Toolstation of which it previously owned 30 per cent, and acquired 13 large stores from failed retailer Focus DIY.
Gross margins grew by 1.3 per cent across its retail operations due to improved purchasing terms, direct sourcing and lower sales incentives, but investments in property and restructuring led adjusted operating margin to actually fall 1.4 per cent to end the year at 4.5 per cent.
Trading in the first seven weeks of 2012 delivered a drop in retail LFLs of 3.1 per cent compared to the same period last year and, although confident in the strength of its business, Travis Perkins says that its research shows that its markets will remain subdued for the rest of this year.
Cooper added: “Having built the UK‘s largest distributor of building materials, we will be focusing on growing returns. With the prospect of the market softening as we go into 2012, the continued improvement in our offer to customers and gains from strategic developments will be the engine of this growth.
“Our management team has proven itself capable of performing well in tough markets and outgrowing our competitors. We look forward to another year of solid progress.”