Wickes owner Travis Perkins to hand back £50m in business rates relief and furlough money as it benefits from DIY boom and construction recovery
- Multiple supermarkets including Asda and Sainsbury’s have also vowed to repay
- Travis Perkins revealed like-for-like sales rose 8.6% in October and November
- Earlier this year, Travis Perkins said it would let go 2,500 staff to cut costs
Wickes owner Travis Perkins has become the latest retailer to announce it will return coronavirus relief money to the government.
It will pay back £50million that it received from the Coronavirus Job Retention Scheme and in business rates relief, following Kingfisher, the B&Q parent company of B&Q, declaring its intention last week to hand back £130million in relief.
Multiple supermarkets including Asda, Tesco, Lidl and Sainsbury’s, as well as Pets at Home have also vowed to repay around £2billion between them.
Wickes experienced higher sales in June, which helped it to cancel out the sluggish level of kitchen and bathroom installations
Travis Perkins has benefited strongly in recent months from Britons both spending more time indoors and on home improvement, especially DIY.
Its latest sales results for October and November showed an 8.6 per cent rise in like-for-like sales, including growth of 19.3 per cent in retail and a third in its Toolstation business.
‘The end market trends experienced during Q3 continued into October and November while the Group also continued to make good progress on retaining sales from branches closed as part of the restructuring activity during the summer, it wrote.
The Northampton-based company also said there was high trade at Wickes and an ‘encouraging recovery’ in domestic repair, maintenance and improvement activity among smaller trade consumers.
However, it admitted the national lockdown in England that began on November 5 negatively impacted their kitchen and bathroom divisions, due in part to the closure of showrooms.
Commerce with some larger customers has also been hurt badly, and there has been weak recovery at its heating and ventilation specialist BSS, interior building products firm CCF, and the ‘larger contract side’ of its plumbing and heating (P&H) division.
Travis Perkins’ share price has fallen by 18 per cent in 2020, though it rose this morning
Travis Perkins admitted the national lockdown in England that began on November 5 hurt their kitchen and bathroom divisions, due in part to the closure of showrooms
While like-for-like sales at its P&H business did increase by a modest 1.9 per cent over October and November, it plummeted by 22.9 per cent on a total sales basis. This caused Travis Perkins’ group sales to decline by 3.3 per cent.
Demand earlier in the year was severely affected by lockdown restrictions, which caused significant harm to its P&H and merchanting operations, and sales plunged by a fifth in the first six months of 2020.
To cut costs, it announced 2,500 staff would be made redundant, several stores would permanently shut, and management pay was slashed by 20 per cent for the May to August period. Fifteen-thousand employees were put on furlough for the first three weeks of lockdown.
B&Q owner Kingfisher has already announced it will pay back £130million in relief
Kingfisher has performed significantly better, by contrast, in both financial and sales terms. Its third-quarter results showed like-for-like and total sales expanding by over 17 per cent each, with growth happening in all markets in where the firm operates.
The Screwfix owner’s share price has risen by 24 per cent this year, while Travis Perkins’ has fallen by 18 per cent, though it had increased by 2.9 per cent soon after midday to £13.36. Their value also remains significantly lower than their 2015 peak.
Both companies have nonetheless stated they will hand back money they claimed from the UK government for help during the coronavirus pandemic.
Dixons Carphone has said today it will not return furlough money despite recording a surge in online sales and underlying pre-tax profit, with the latter soaring by £87million on the same period last year.
Its chief executive Alex Baldock commented that the retailer had ‘been responsible in our use of government support’ and that the outlook remained ‘uncertain. He added: ‘We’re still nowhere near our full potential. Much hard work lies ahead.’