Travis Perkins PLC (LON:TPK) has said it will return the business rates relief and furlough money to the government for its Wickes and Toolstation chains as it reported continued strong demand across the DIY market.
The repayment totalling roughly £50mln will correspondingly reduce the expected outturn for the FTSE 250 group’s adjusted underlying profit (EBITA) for the year, the company said in a statement.
Wickes and Toolstation are both benefitting from strong ongoing demand for household repair, maintenance and improvement jobs, which was reported in the third quarter and were said to have continued into October and November.
The group's builders’ merchants businesses have been hit by a slower recovery in sales volumes from larger customers, however, with some larger customers said to be more impacted by the second national coronavirus lockdown in November, alongside a negative impact on the kitchen and bathroom businesses as showrooms were forced to close.
On the plus side, the group said it made further progress on retaining sales from branches closed as part of the restructuring activity during the summer.
Liquidity headroom at the end of November was £988mln, including an undrawn £400mln bank facility, and with a £250mln five-year public bond issued to replace other maturing debt.
A £100mln payment against deferred VAT has been made and management said they continue to expect covenant net debt at the year-end to be similar to the position at the end of June.