Travis Perkins bounced again to revenue in 2021, as sustained excessive demand for property renovations enabled it to offset rising constructing materials prices.
The house enchancment retailer reported a £241million revenue for 2021, in comparison with a £35million loss in 2020 when the primary lockdown severely impacted commerce and led to provide chain disruption.
Whole income surged by just below 1 / 4 to £4.6billion as gross sales at its merchanting arm grew by round £750million following robust demand for house DIY enhancements and new house completions.
Restoration: Travis Perkins reported a £241million revenue for 2021, in comparison with a £35million loss the 12 months earlier than when the primary lockdown severely impacted the agency’s buying and selling
The group’s Toolstation enterprise noticed its income improve by one other fifth to £761million, with gross sales having greater than doubled during the last three years.
This helped it achieve further market share and to spice up its retailer property throughout the UK and Europe by one other 110 institutions final 12 months, with at the least 100 extra branches anticipated to be added this 12 months.
Its European enterprise did make a £20million loss as a consequence of prices associated to retailer growth, nevertheless it nonetheless made a major revenue from property because of the offloading of its former distribution centre in Tilbury.
Travis Perkins shares have been down 3.5 per cent to £14.11 as we speak. After plummeting at first of the pandemic, their worth rose sharply and this continued for a lot of final 12 months earlier than falling again. The inventory is now price about the identical as 12 months in the past and barely under its pre-pandemic degree.
Toolstation’s commerce has additionally been much less affected by value inflation than Travis Perkins’ merchanting division, which noticed the value of products it sources climb by round 13 per cent within the second half of the 12 months because of product shortages.
The FTSE 250 firm expects inflationary pressures to stay however nonetheless forecasts stability in commerce amid the normalisation of hybrid working, buoyant ranges of property gross sales and progress within the variety of housing developments.
Chief govt Nick Perkins mentioned: ‘While the quickly recovering market created challenges round inflation and product availability, we have now navigated them effectively to ship an excellent monetary efficiency.”
Persevering with progress: Travis Perkins’ Toolstation enterprise noticed its income improve by one other fifth to £761million, that means that its gross sales have greater than doubled during the last three years
The agency additionally revealed it’s extending its share buyback scheme by one other £70million after buying £170million of its personal shares following the sale of its plumbing and heating enterprise to H.I.G. Capital.
This sale shaped a part of the corporate’s plan to streamline its operations, which it set out in direction of the top of 2018 and included targets to chop prices by as much as £30million and develop its normal merchanting enterprise.
Travis Perkins introduced its intention to demerge the constructing commerce retailer Wickes in 2019 as a part of this technique, although this was not accomplished till April final 12 months as a result of pandemic.
AJ Bell funding director Russ Mould mentioned: ‘We’re at a giant turning level in society which may decide whether or not Travis Perkins continues its run of fine luck or not.
‘Covid and the related lockdowns made folks respect their houses extra, which drove demand for repairs and enhancements. That stored the tills ringing at Travis Perkins as tradesmen queued up for the package wanted to repair houses.
‘The backdrop for Travis Perkins is now much less beneficial. Loads of folks now again at work within the workplace means there’s much less concentrate on how the house appears to be like. There’s additionally stress on household funds from rising inflation, so owners may postpone doing these jobs round the home.’
Up and down: The worth of Travis Perkins shares rose significantly for a lot of final 12 months earlier than falling again and at the moment are price about the identical as 12 months in the past