Resilient trading amidst significant uncertainty
Highlights
- Continued progress on strategic agenda across digital enablement, customer fulfilment, process simplification and branch network rationalisation despite the challenges of Covid-19
- Toolstation strong outperformance maintained with like-for-like growth of 22.2%; branch rollout continues at pace in UK and Europe
- Robust H2 recovery in Merchanting and P&H driven by RMI demand
- Wickes taking market share in core DIY with like for like revenue growth of 19.3%**; demerger process recommenced
- Strong free cashflow generation; covenant net debt reduced by £304m to £40m; successful refinancing of September 2021 bond
| £m (unless otherwise stated) | Note | FY 2020 | FY 2019 | Change |
| Revenue | 6,158 | 6,956 | (11.5)% | |
| Like-for-like revenue growth1 | 18 | (7.1)% | 3.8% | (10.9)ppt |
| Adjusted operating profit1 | 6a | 227 | 442 | (48.6)% |
| Adjusted earnings per share1 | 12b | 42.4p | 112.7p | (62.4)% |
| ROCE1 | 16f | 5.5% | 10.1% | (4.6)ppt |
| Covenant net debt1 | 15a | 40 | 344 | (304) |
| Dividend per share | 13 | 0.0p | 15.5p | |
| Operating profit | 77 | 232 | ||
| Total profit / (loss) after tax | (22) | 123 | ||
| Basic earnings / (loss) per share | 12a | (8.8)p | 48.9p |
(1) Alternative performance measures are used to provide a guide to underlying performance. Details of calculations can be found in the notes listed
Financial highlights
- Total revenue from continuing businesses returned to growth in H2 at 1.4%*, demonstrating the resilience of the Group’s business models
- Adjusted operating profit of £227m reflecting lower volumes partially offset by actions to reduce operating costs, including both short term controls and acceleration of longer term plans, coupled with appropriate government support in the merchant businesses
- Delivered £120m annualised cost savings with the focus on strengthening the core business by closing smaller, subscale branches and delayering management
- Net adjusting items of £140m, primarily relating to the restructuring programme
* Total Group revenue excluding Tile Giant and Primaflow F&P which were disposed during 2020. Toolstation Europe is included as if fully consolidated for both 2019 and 2020.
**On a calendar year basis. For the 52 weeks to 26th December 2020 Wickes Core like-for-like sales were +18.8%
Nick Roberts, Chief Executive Officer, commented:
“2020 was a year of unprecedented challenges and I am full of admiration for the energy and determination of our colleagues to ensure the safety of our customers, suppliers and each other.
Despite these challenges, we have shown great agility and versatility in adapting our working practices, further digitalising our engagement with customers and reshaping our business to suit the changing demands of our markets.
Our teams have also been able to make excellent progress on a number of key initiatives supporting our strategic objectives, particularly around simplifying commercial deals and refining our pricing architecture, which will drive future benefits.
In addition, I am pleased today to be able to confirm that the process to demerge Wickes has recommenced. The Wickes digitally-led model has proved highly effective during the pandemic and the business is in great shape to embark on its journey as a standalone entity.
Whilst uncertainty remains, we have seen a good recovery through the second half which gives us confidence that the fundamental drivers in our markets are robust. The continuing progress against our strategic plans leaves the Group well placed to outperform in those markets.”
Management are hosting a virtual results presentation at 10.00am. Please register at the following link: https://www.investis-live.com/travis-perkins/602407799a13881000ca64fe/nmsl
