Building material company, Travis Perkins (LON:TPK), has shed light on the impact of COVID-19 in a trading update that highlighted strong sales until lockdown measures were in place.
However, the pandemic shut large parts of Travis Perkins’ business, leading to a 4.8% reduction in sales across the group in the first quarter.
The company, which also owns Wickes and Toolstation, said it saw a £50m cash outflow during the first month of the coronavirus lockdown and has started to reduce cash commitments. Furloughing staff and deferring VAT payments will assist in TPK’s cash conservation. Travis Perkins have furloughed roughly half of their 30,000 staff for three weeks on full pay.
Providing some optimism on the reopening of the UK economy, Travis Perkins said it expected sales resumption to stem the flow in the coming weeks as its outlets begun to reopen.
The company also said it expected to benefit to the tune of £90m from business rates holidays.
House builders such as Taylor Wimpey have recently announced they will reopen sites again in early May, signalling a trend across the industry that will lead to increased demand for Travis Perkins goods.
Nick Roberts, Chief Executive, commented on the update:
“In light of the COVID-19 emergency, we have established a new operating model that has kept colleagues and customers safe, operating within Government guidelines, and enabling branches across all of the Group’s businesses to remain open. Moreover, we have provided essential services and support to keep the nation’s critical infrastructure maintained and operational and the UK’s homes warm, dry and safe during this time of need.
“We continue to adapt our operations, applying stringent social distancing and using technology to enable contactless operations, and we are therefore able to respond to the Government’s call to ensure that the construction industry can continue to deliver on crucial programmes and projects and be an engine for future economic recovery.
“As we move forward we will continue to adjust our operations, with our foremost priority to keep colleagues and customers safe and the industry supplied with the materials it needs.”
Shares in Travis Perkins were 3.2% higher on the day at 1,052p and are down 34% year-to-date.
