Travis Perkins is moving ahead with the demerger its Wickes DIY chain having put the plan on hold in March last year to focus on managing the business through the pandemic.
Having confirmed earlier this month that it would recommence the process, the group announced today that it has submitted its demerger circular and prospectus to the Financial Conduct Authority (FCA) for approval, with plans for Wickes shares to be admitted to trading on the Main Market of the London Stock Exchange.
The demerger is aimed at enabling the management teams of Travis Perkins and Wickes to pursue their own independent strategies and execute distinct business plans that deliver the best results for customers and company returns.
“The move is a significant milestone and 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,” said Nick Roberts, Chief Executive of Travis Perkin.
“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 at Wickes, added: “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.”
Recent annual results from Travis Perkins revealed that like-for-like sales at the Wickes chain rose 5% during 2020, despite disruptions to trading during the first lockdown. Performance in the year to 31 December was said to have been driven by strong core DIY sales growth of 19% as it benefited from customers focusing on home improvements during the pandemic.
Looking ahead, the group said: “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.”
NAM Implications:
- Wickes building itself a good fact-basis for a solo run…
- …and improved focus on the core business.
- BTW, an after-Lockdown pointer for other retailers operating two business models?
