Travis Perkins has continued with its decision to demerge home improvement retailer Wickes, having put the process on hold to focus on managing through the COVID-19 pandemic.
The decision to demerge Wickes was made in July 2019 and having completed the majority of the demerger work by March 20, 2020 it was then put on hold.
With the group, including Wickes, having demonstrated the resilience of their business through 2020, the board announced the decision to recommence the demerger process on March 2, 2021.
According to Travis Perkins the demerger of Wickes was to enable a more streamlined cost structure and faster decision-making process. It followed a “significant” improvement in the financial performance of Wickes.
Travis Perkins recently sold off its wholesale plumbing and heating business Primaflow.
The demerger of Wickes will enable both management teams to pursue their own independent strategies, each focusing on separate business plans and allocation of capital.
Wickes operates from 233 stores and digital channels, including its TradePro mobile app.
Its online customers almost doubled in 2020, with click and collect orders up 450% and home deliveries increase of 120%.
The home improvement retailer recorded revenue of £1,347million, with 5.0% like-for-like revenue growth, and adjusted operating profit of £82million.
Its business was driven by strong DIY sales in the second half of 2020, while its Do It For Me orders were 50% lower year-on-year through the winter sale period, as showrooms remained closed.
However Wickes is confident in a recovery of Do It For Me sales with pent-up demand, evidenced by a high level of enquires, which it believes are likely to come through when lockdown restrictions ease.
Chief executive officer of Travis Perkins Group Nick Roberts said: “I am very pleased that we have reached a significant milestone in the process to demerge Wickes from the Travis Perkins Group.
“It is testament to the strength of both the group and Wickes operating models that we are back on track to complete the demerger despite the pandemic.
“The demerger is an important step towards simplifying the group and enabling Travis Perkins to focus on its trade customers.
“The separation will allow both businesses to allocate capital to drive growth and further enhance their market-leading positions.”
Chief executive officer of Wickes David Wood commented: “This is a key milestone on our journey to listing on the London Stock Exchange as a standalone business in what will be a transformational moment for Wickes.
“I am very proud of our performance last year amid the challenges faced by our colleagues, our supply partners and, of course, our customers.
“The results we delivered during this period are evident of the strength of our unique proposition, digital capability and efficient operating model, which has enabled us to respond rapidly to the changing demands of our customers.
“The past year has prompted many of us to think differently about how we use our homes, and as a result, we are seeing strong demand from customers who are looking to make changes to their living spaces.
“We are able to provide customers with everything they need to achieve their home improvement plans and we are well placed to capitalise on the exciting growth opportunities we see in our markets while creating long-term value for all our stakeholders.
“The current year has started well and we are confident in continuing to deliver sales growth ahead of the market for the full year.”