April 28, 2020 / 6:34 AM / a month ago

Travis Perkins sales hit by British lockdown, cash outflow easing

FILE PHOTO: Bricks are seen at the Vauxhall depot of building material supplier Travis Perkins in London, Britain, October 25, 2013. REUTERS/Neil Hall

LONDON (Reuters) - Britain’s coronavirus lockdown knocked two thirds off revenue at Travis Perkins (TPK.L) in the first three weeks of April, although the building materials distributor said it had traded well during the first two and a half months of the year.

Shares in Travis Perkins were up 4.1% at 1041 GMT, paring 2020 losses to 34% and valuing the business, which trades from more than 20 businesses including Travis Perkins builders merchants, the Wickes home improvement chain, Toolstation and Tile Giant, at 2.7 billion pounds ($3.4 billion).

The group briefly closed all its operations when Britain went into lockdown on March 23 but since late March has been running a “service-light” operating model, focused on call and collect or direct delivery services.

While its overhead cash outflow was 50 million pounds in the first month of lockdown, Travis Perkins said that with more branches beginning to open and a corresponding increase in sales volume, this was expected to fall over the coming weeks.

Travis Perkins said it has strong liquidity to get it through the crisis. With a 400 million pound revolving credit facility fully drawn, it has 522 million pounds of cash on deposit.

Britain’s biggest building supplies distributor is not alone in suffering the effects of the lockdown.

The Confederation of British Industry said on Tuesday that the country’s retailers suffered their biggest fall in sales since the 2008 financial crisis in the first half of April as the pandemic hit demand and forced store closures.

Travis Perkins, which last month withdrew its market guidance, suspended its proposed full-year dividend and paused the demerger of Wickes, said its total first-quarter sales fell 4.6% and were down 3.8% on a like-for-like basis.

About half of the group’s 30,000 workforce were furloughed under the government’s job retention scheme for the first three weeks of the lockdown.

Reporting by James Davey; Editing by David Goodman and Alexander Smith

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