Travis Perkins details plans for Wickes demerger

5657
Wickes offer
// Travis Perkins confirms plans to demerge Wickes by the first half of 2020
// Wickes’ like-for-like sales up 9.7 per cent
// Travis Perkins board says Wickes “is well positioned to thrive as a stand-alone business”

Travis Perkins has revealed more details of its plans to demerge its DIY chain Wickes.

Reporting back on its interim results for the six months to June 30, Travis Perkins said Wickes had registered like-for-like sales growth of 9.7 per cent “after a difficult period in 2018”.

Travis Perkins’ board members said they intend to demerge Wickes to shareholders as a standalone business in the first half of 2020.

As part of the interim results, Travis Perkins noted Wickes’ total revenue came in at £695 million.

It added that the retailer’s core DIY sales benefited from “a strong, clear and well balanced trading plan combined with the addition of new ranges, particularly in decorating and landscaping, and improvements made in the supply chain to increase product availability in store”.

Wickes’ gross margins had remained under pressure from competition pricing activity, but were broadly stable for 2019. 

“I am 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,” Travis Perkins chief executive John Carter said.

“The plumbing and heating sales process is well underway, and we are today announcing our intention to demerge Wickes as a separate business.”

Earlier this month former Tesco executive David Wood replaced Simon King as Wickes chief executive, with the sale led by Travis Perkins finance chief officer Alan Williams.

The building merchant added: “The board believes that Wickes, under a management team led by David Wood, is well positioned to thrive as a stand-alone 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.”

Travis Perkins revealed last November that it was reviewing its Wickes fascia in a bid to “maximise the value” from the chain, with Wickes’ operating profits down by almost a third to £69 million in the past two years.

A potential sale could raise between £400 million to £500 million.

Click here to sign up to Retail Gazette‘s free daily email newsletter