Travis Perkins halts plumbing and heating sale amid ‘unprecedented’ uncertainty
Travis Perkins blamed “unprecedented” uncertainty as it put the brakes on the sale of its plumbing and heating business.
The builders’ merchant said it was pausing the disposal of the unit, which was put on the market last year, but would continue with plans to demerge DIY chain Wickes from the group.
“Given the current unprecedented level of uncertainty, we have decided to pause the sale process of the plumbing and heating business for the time being,” Travis Perkins said in a message to shareholders on Tuesday.
The company set out plans to divest the plumbing business in December last year as it tried to rein in costs.
Analysts at Peel Hunt called the decision to pause the sale “disappointing”.
It comes after less than three months in charge for new chief executive Nick Roberts, who took over earlier this year.
Mr Roberts said he has spent time visiting branches and it has convinced him that the company can win more market share.
“The plan to simplify the group’s portfolio of businesses remains the right one, with good progress made through the quarter towards reducing cost and complexity and enabling greater focus and more disciplined capital allocation to our advantaged trade-focused businesses,” he said.
There were few other big surprises in the company’s third-quarter update, with full-year performance largely in line with expectations, said Goodbody analyst David O’Brien.
“The retail business in particular has performed very well,” he said. It grew sales by 8.3%.
However, Mr Roberts warned that Travis Perkins’ outlook for the near term remains “cautious”.
“The group delivered a solid performance in the third quarter, despite trading conditions becoming incrementally more challenging through the course of the summer as a result of the ongoing market uncertainty,” he said.
The news comes after profit warnings from rivals such as SIG and Grafton, said Priyal Woolf, an analyst at Jefferies.