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TRAVIS PERKINS Proposed demerger of Wickes Group plc and Capital Markets Event

Directive transparence : information réglementée

24/03/2021 08:00

Travis Perkins (TPK)
Proposed demerger of Wickes Group plc and Capital Markets Event

24-March-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

24 March 2021

Travis Perkins plc

 

Travis Perkins plc

("Travis Perkins" or the "Group")

 

Proposed demerger of Wickes Group plc and Capital Markets Event

 

In December 2018, Travis Perkins announced a long-term strategy based around focusing on its advantaged trade businesses and simplifying the Group to enable a more streamlined cost structure and faster decision making. In line with these strategic aims, and following a significant improvement in the financial performance of Wickes Group plc ("Wickes" or the "Company"), the Group announced the intention to demerge Wickes in July 2019.

 

Having completed the vast majority of the work on the Wickes demerger, on 20 March 2020 the Group announced that it had placed the process on hold in order to focus on managing through the COVID-19 pandemic and to maximise liquidity across the Group. With the Group, and Wickes in particular, having demonstrated the resilience of their operating models in unprecedented market conditions through 2020, the Board announced the decision to recommence the Wickes demerger process on 2 March 2021.

 

The demerger will enable the management teams of Travis Perkins and Wickes to pursue their own independent strategies, each focusing on executing a distinct business plan to deliver the best service to their primary customer base and allocating capital in the optimum way to deliver sustainable returns into the future.

 

Today marks the next milestone in the process with Travis Perkins announcing that the Circular in relation to the proposed demerger (the "Circular") and the Prospectus in relation to the proposed admission of the Wickes shares (the "Prospectus") have each been submitted to the Financial Conduct Authority (the "FCA") for approval. It is intended that the Wickes shares will be admitted to the Premium listing segment of the Official List of the FCA and admitted to trading on the Main Market of the London Stock Exchange.

 

A further announcement will be made once the Circular and the Prospectus have been approved for publication by the FCA, which is expected later today.

 

Nick Roberts, Chief Executive Officer of Travis Perkins Group, commented: "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."

 

David Wood, Chief Executive Officer of Wickes, 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 evidence 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 our 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."

 

Wickes Business Highlights

 

  • Wickes is a digitally-led, service-enabled home improvement retailer, delivering choice, convenience, value and best-in-class service to customers across the United Kingdom making it well placed to outperform its growing markets. In response to gradual structural shifts in its markets over recent years, Wickes has rebalanced its business to focus on three key customer journeys - Local Trade, DIY (together "Core") and Do-it-for-me ("DIFM")
  • Wickes operates in the growing home improvement market, which is underpinned by robust fundamentals. This market has demonstrated underlying growth of around 2.5% CAGR in the period 2013 to 2019 and this growth is forecast to continue for the next five years. For the period 2013 to 2020 underlying growth was 1.9% CAGR
  • Wickes operates from its network of 233 right-sized stores, which support nationwide fulfilment from convenient locations throughout the United Kingdom, and through its digital channels including its website and TradePro mobile app for trade members. These digital channels allow customers to research and order an extended range of Wickes products and services, arrange virtual and in-person design consultations, and organise convenient home delivery or "click-and-collect" slots
  • Wickes' established, efficient and integrated service model enabled the business to deliver a strong performance in 2020 despite disruption caused by the pandemic. Digital customers almost doubled and click-and- collect orders were up 450% for the year, whilst home delivered sales increased by 120% for the year
  • Three independent non-executive Directors have been added to the Wickes Board, in addition to Christopher Rogers, Chairman. The Directors are Mark Clare; Sonita Alleyne, OBE, FRSA; and Michael Iddon. Details of their relevant experience are in the notes to editors

 

Wickes Financial Highlights

 

  • Wickes has demonstrated strong growth ahead of the market. From 2013 to 2019, the Group's revenue grew at a CAGR of 4.9%, increasing by over £300m to £1,292m in 2019
  • In 2020, Wickes recorded revenue of £1,347m, with 5.0% like-for-like revenue growth, and adjusted operating profit of £82m
  • The 2020 performance was driven by the strong performance of Core, with growth of 18.8% on a like-for-like basis, leveraging Wickes' well-developed digital and flexible fulfilment capability and increasing market share across the year. However, DIFM was significantly impacted in 2020 by restrictions on showroom openings and resulted in like-for-like revenue being down by 27.8%

 

 

Current Trading and Outlook

 

  • Performance trends in the second half of 2020 have continued into the current financial year. Strong Core sales seen in the second half of 2020 continue whilst DIFM orders were c. 50% lower year-on-year through the key winter sale period, as showrooms remain closed
  • Whilst sales remain robust, the benefit has been offset by associated costs with high participation of customer delivery and assuring a COVID-19 safe operating environment for colleagues and customers
  • Although the economic outlook and trading environment remains uncertain, Wickes expects to deliver sales growth ahead of its markets for the full year. Core growth is expected to moderate against tougher comparatives through the year and management is confident in a recovery of DIFM sales with pent up demand, evidenced through a high level of enquiries, likely to come through as lockdown restrictions ease

 

Details on the Prospectus and Circular

 

When approved by the FCA, the Prospectus and Circular will be made available on Travis Perkins' website at www.travisperkinsplc.co.uk/investors and the Prospectus will also be made available on Wickes' website at www.wickesplc.co.uk.

 

Details of the Capital Markets Event

 

The Wickes management team will host a virtual Capital Markets Update at 10.30am on Friday 26 March 2021 for investors and analysts. The presentation will provide an overview of Wickes' resilient performance throughout 2020, alongside a summary of its distinctive customer proposition, financial framework and vision for the delivery of continued growth. 

 

The presentation will be followed by live Q&A with the Wickes management team. To register, please sign up here.

 

Ends

 

Enquiries  

 

Travis Perkins - Investor Relations

Matt Worster     +44 (0) 799 008 8548

matt.worster@travisperkins.co.uk

 

Heinrich Richter     +44 (0) 739 212 5417

heinrich.richter2@travisperkins.co.uk

 

Powerscourt      +44 (0) 207 250 1446

PR Adviser to Travis Perkins

Justin Griffiths, James White   

travisperkins@powerscourt-group.com

 

Wickes      

Investor Relations    

Andy Hughes     +44 (0) 777 669 2736

wickes@headlandconsultancy.com

 

Headland     +44 (0) 203 805 4822

PR Adviser to Wickes

Lucy Legh, Henry Wallers, Charlie Twigg  

wickes@headlandconsultancy.com

 

Citigroup Global Markets Limited   +44 (0) 207 986 4000

Joint Financial Adviser, Joint Sponsor and Joint Corporate Broker to Travis Perkins and Wickes

Andrew Seaton

Robert Redshaw

Martin Weltman

Peter Catterall    

 

Deutsche Bank AG, London Branch   +44 (0) 207 545 8000

Joint Financial Adviser, Joint Sponsor and Joint Corporate Broker to Travis Perkins and Wickes

Charles Wilkinson

Simon Hollingsworth     

Mark Hankinson

Raed El-Dana

 

Notes to Editors

 

As part of the demerger, and in keeping with requirements of the UK Corporate Governance Code, three independent non-executive Directors have been added to the Wickes Board, in addition to Christopher Rogers, Chairman.

 

Christopher Rogers - Chairman

 

Chris was appointed as Chairman on 23 March 2021. Since September 2013 he has served as a Non-Executive Director of Travis Perkins plc where until 28 April 2020 he was the Senior Independent Director. Chris is currently Non-Executive Director of Sanderson Design Group plc (formerly Walker Greenbank plc), a Non-Executive Director of Vivo plc and of Kerry Group, and is a visiting fellow at Durham University. During his executive career, Chris held a number of senior roles in and directorships of public companies. From 2005 to 2016 Chris was an Executive Director of Whitbread plc, serving as Group Finance Director from 2005 to 2012 and as Global Managing Director of Costa Coffee from 2012 to 2016. He was Group Finance Director of Woolworths Group plc and Chairman of the Woolworths Entertainment businesses from 2001 to 2005. Prior to that, Chris held senior roles in both the finance and commercial functions of Comet Group plc and Kingfisher plc.

 

Mark Clare - Senior Independent Non-Executive Director

 

Mark has extensive public listed company experience in the consumer service, property and construction sectors, particularly in customer facing businesses and has served on a number of public listed company remuneration committees. He is currently the Chairman of Grainger plc; Non-Executive Director and Chairman Designate of Aggreko plc; the Senior Independent Director at United Utilities Group plc; and Non-Executive Director at Premier Marinas Holdings Ltd. Previously Mark was the Senior Independent Director at Ladbroke's Coral Group plc from 2016 until 2018; and Non-Executive Director and Audit Committee Chair at BAA plc from 2001 until 2006. Mark's executive career included Chief Executive for Barratt Developments plc from 2006 until 2015; the Managing Director of Centrica's retail subsidiary British Gas from 2002 to 2006; and CFO of Centrica plc from 1997 to 2002. He also served as a trustee of the Energy Savings Trust, the Green Building Council and BRE. Mark is a qualified accountant and held a number of senior finance roles earlier in his career including at Nortel, STC and GEC-Marconi.

 

Sonita Alleyne, OBE, FRSA - Independent Non-Executive Director

 

Sonita has extensive experience as a Non-Executive Director on both private and public sector boards. She is a board member of the London Legacy Development Corporation, The Cultural Capital Fund and The Museum of London and recently joined the Main Advisory Committee of the Freelands Foundation.  She is the Master of Jesus College, Cambridge. Previously Sonita was Chair of the BBFC's Management Committee and the Radio Sector Skills Council and a board member of Archant. Sonita spent five years on the BBC Trust and was a non-executive director of the Department for Culture, Media and Sport. Sonita was also a board member of the National Employment Panel and the London Skills and Employment Board. In addition, she held membership of the Court of Governors at the University of the Arts London. 

 

Michael Iddon - Independent Non-Executive Director

 

Mike has extensive public listed company experience, having held a number of senior finance roles throughout his career and has been the Chief Financial Officer of Pets at Home Group plc since 2016. He was previously the Chief Financial Officer of New Look from 2014 to 2016 and prior to this, he held a number of senior finance roles over 13 years for Tesco plc both in the UK and overseas. These roles included Group Planning, Tax and Treasury Director, UK Finance Director and Chief Financial Officer of Tesco Homeplus (South Korea). Mike has also held senior roles with Kingfisher plc and Whitbread plc. Mike is a Chartered Accountant and a graduate of the Harvard Advanced Management Programme.

 

Important Information

 

This announcement does not constitute an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for any securities in any jurisdiction nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with any contract therefor.

 

In particular, this announcement does not constitute an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for, any securities in the United States. The shares of Wickes have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act, and in compliance with any applicable State or local securities laws. There will be no public offer of the shares of Wickes in the United States.

 

No offer of shares of Wickes will be made as part of the demerger and the Prospectus will be published solely in connection with the proposed admission of Wickes' ordinary shares to the premium listing segment of the Official List and to trading on the London Stock Exchange ("Admission").

 

Citigroup Global Markets Limited ("Citi"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated in the UK by the Financial Conduct Authority ("FCA") and the PRA, is acting as financial adviser and sponsor exclusively for Travis Perkins and Wickes and for no one else in connection with the demerger, Admission or any other matters described in this announcement and will not be responsible to anyone other than Travis Perkins and Wickes for providing the protections afforded to clients of Citi nor for providing advice in connection with the demerger, Admission, or any other matters referred to in this announcement. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Citi in connection with the demerger, Admission, this announcement, any statement contained herein, or otherwise.

 

Deutsche Bank AG is a joint stock corporation incorporated with limited liability in the Federal Republic of Germany, with its head office in Frankfurt am Main where it is registered in the Commercial Register of the District Court under number HRB 30 000. Deutsche Bank AG is authorised under German banking law. The London branch of Deutsche Bank AG is registered in the register of companies for England and Wales (registration number BR000005) with its registered address and principal place of business at Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank AG is authorised and regulated by the European Central Bank and the German Federal Financial Supervisory Authority (BaFin). With respect to activities undertaken in the UK, Deutsche Bank AG is authorised by the PRA with deemed variation of permission. It is subject to regulation by the FCA and limited regulation by the PRA. Details about the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the FCA's website. In connection with the demerger and Admission, Deutsche Bank AG is acting through its London branch ("Deutsche Bank"). Deutsche Bank is acting as financial adviser and sponsor exclusively for Travis Perkins and Wickes, and no one else in connection with the demerger and Admission, and Deutsche Bank will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the demerger or Admission and will not be responsible to anyone other than Travis Perkins and Wickes for providing the protections afforded to clients of Deutsche Bank or for providing advice in relation to the demerger or Admission or any other transaction, matter or arrangement referred to in this announcement. Neither Deutsche Bank nor any of its affiliates, directors or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Deutsche Bank in connection with the demerger, Admission, this announcement, any statement contained herein, or otherwise.

 

This announcement has been issued by and is the sole responsibility of Travis Perkins. No representation or warranty, express or implied, is or will be made, as to or in relation to, and no responsibility or liability is or will be accepted by either of Citi or Deutsche Bank or by any of their respective affiliates, directors, officers, employees or advisers for the contents of this announcement, including its accuracy, completeness and verification or for any other statement made or purported to be made by either of them, or on behalf of either of them in connection with Travis Perkins, Wickes, the Group, the Wickes Group, the demerger or Admission.

 

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are based on current beliefs and expectations and are subject to a number of known and unknown risks and uncertainties that may cause actual results, performance or achievements of the Group or the Wickes Group or industry results to differ materially from any future events, results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking include all matters that are not historical facts. Forward-looking statements speak only as of the date of this announcement. Persons receiving this announcement should not place undue reliance on any forward-looking statements. Unless otherwise required by applicable law or regulation, each of Travis Perkins, Wickes and their advisers (including Citi and Deutsche Bank) disclaims any obligation or undertaking to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.



ISIN: GB0007739609
Category Code: PDI
TIDM: TPK
LEI Code: 2138001I27OUBAF22K83
OAM Categories: 3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 96102
EQS News ID: 1177758

 
End of Announcement EQS News Service

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