Covid-19: Travis Perkins suspends divi, puts Wickes demerger on hold

Building materials group Travis Perkins suspended its full year dividend, postponed the planned demerger of its Wickes DIY unit and scrapped future guidance as it braced for the impact of the coronavirus.

The group said trading had not seen any significant impact but expected the “environment to change quickly and materially in the coming weeks”.

It said trading in 2020 had been in line with expectations, with solid trading in the merchanting businesses and a strong start in Toolstation and Wickes. Total group sales grew by 2.4% year-to-date as the company said it entered the coming period of volatility “in a strong position and with a robust balance sheet”.

“The group has significant liquidity headroom; at 19 March 2020 the Group held £185m of cash on deposit, in addition to an undrawn revolving credit facility of £400m. The group maintains a close relationship with its core lending syndicate. Overall, the group's debt maturities are well spread with no immediate refinancing required,” the company said.

“Should the group experience a reduction in sales volume, either from enforced store closures or a wider reduction in economic and market activity, plans are in place to balance the protection of profitability and preservation of operating cash flow with the long-term needs of the business.”

This included cutting operating costs an assessment of capital expenditure and management of inventory and other working capital, Travis said, and use of tax relief and other government measures “as they become available”.