Travis Perkins announced on Tuesday that it planned to sell its plumbing and heating division. This move is part of a broader corporate restructure that involves “simplifying” the business to “improve” returns.
The business aims to focus on trade customers and drive returns from its advantaged trade businesses. Equally, it hopes to simplify the group and streamline costs in order to encourage a strong cash flow. The intention to sell its Plumbing and Heating Division comes following a successful transformation.
In addition, Travis Perkins hopes to improve the performance of its Wickes DIY chain.
On Tuesday, the Travis Perkins management team will host a capital markets update in the country’s capital. The event aims to cover the company’s immediate priorities and ambitions for its future.
Travis Perkins is a UK based builders’ merchant and home improvement retailer in Northampton. It currently operates 1,900 outlets with over 27,000 employees across the UK and Ireland. Owner of the well known brand Wickes, Travis and Perkins is part of the FTSE 250.
CEO John Carter commented on the announcement:
“We have developed a clear plan to focus on delivering best-in-class service to our trade customers, and to simplify the Group to reduce complexity, speed up decision making and reduce costs. Our trade businesses hold strong positions in attractive markets, and these initiatives will enable us to concentrate our management time and capital in the highest returning areas.”
“Our strong balance sheet and free cash flow generation, driven by growing earnings and lower capital expenditure, will underpin our commitment to drive shareholder value and a progressive dividend.”
Its short term goal is to focus on strengthening the performance of Wickes and capitalise on its popularity in the DIY market. In the medium term, the board will also look to review the options for maximising its value. According to Sky News, one of these options could be a sale.
The group also announced that it plans further annualised cost savings of £20-30 million, which it hopes to deliver over the next year and a half.
Tuesday’s market news also includes the world’s leading industrial thread manufacturer, Coats, investing in tech start-up Twine Solutions. Elsewhere, Wizz Air reported an 11% jump in its passenger numbers. and Rentokil Initial announced a £1.5 billion pension scheme deal.
At 09:52 today, shares in Travis Perkins plc (LON:TPK) were trading at 0.30%.