travis perkins plc · travis perkins 449 15 11 (3) 472 keyline 65 - - - 65 ccf 21 - - - 21 tp...

Travis Perkins plc

Interim Results6 months ended 30 June 2004

1

Tim Stevenson

Chairman

Travis Perkins plc Interim Results – 6 months ended 30 June 2004 2

Financial highlights

Turnover £913.6m +11.9%

Operating profit £109.3m +15.3%

PBT £95.3m +17.9%

Like-for-like free cash flow £85.3m +34.1%

EPS (basic) 56.3p +18.5%

EPS (adjusted) 63.8p +18.6%


Paul Hampden Smith

Finance Director


Summary profit and loss account6 months 6 months

30 June 2004 30 June 2003 Change£m £m %

Turnover 913.6 816.6 11.9%

Operating profit 109.3 94.8 15.3%

Goodwill amortisation (8.5) (7.3) Profit on sale of properties - 0.2Net interest payable (3.7) (4.6)Other finance cost (1.8) (2.3)

Profit before tax 95.3 80.8 17.9%

Basic EPS 56.3p 47.5p 18.5%Adjusted EPS 63.8p 53.8p 18.6%Dividend per share 9.5p 7.6p 25.0%


Turnover

2003 2004

Acquisition 8.4%

Price 2.7%Volume 0.0%Working days 0.8%Like-for-like 3.5%

Total 11.9%

6 months ended 30 June

£816.6m

£913.6m


Operating profit

2000 2001 2002 2003 2004

Operating margin

H1 9.8% 10.0% 11.4% 11.6% 12.0%

H2 9.4% 10.2% 11.0% 11.2%

Full year 9.6% 10.1% 11.2% 11.4%

£57.6m£62.7m £75.6m

£94.8m£109.3m



Operating profit

2003 2004

11.6%

12.0% 2003 11.6 %

Productivity 0.3 % Trading margin 0.3 %Overhead efficiency 0.1 %Jayhard and B&G

dilution (0.3)%______

2004 12.0 %______



Return on average capital employed

19.3%21.8%

26.5% 26.3% 27.4%

2000 2001 2002 2003 2004



Turnover per employee

2000 2001 2002 2003 2004

£158k £160k £165k£182k

£192k6 months ended 30 June


Demand mix

Year ended 30 June 2004 (2003)

% of market

RMI

Housing - new

Other - new

56%(56%)

29% (28%)

15% (16%)


Mix of business

6 months ended 30 June 2004 (2003)

Heavy BuildingMaterialsLightside (incl. P&H)

Timber & ForestProductsToolhire

17.9% (18.9%)

51.0% (54.5%)

30.0% (25.4%)

1.1% (1.2%)


Sales ratios

6 months ended 30 June 2004 (2003)

Credit 78.3% Cash 21.7%(80.3%) (19.7%)

Yard 81.9% Direct 18.1%(80.8%) (19.2%)

Collected 42.6% Delivered 57.4%(40.9%) (59.1%)


Geographical distribution of sales

30.0% (30.7%)

16.9% (17.1%)

27.6% (26.6%)25.5% (25.6%)

% of total 2004 6 month sales(% of total 2003 6 month sales)


Balance sheet

Fixed assets – tangible 310.4 275.0Fixed assets – intangible 285.6 247.8Current assets

Stock 184.4 159.9Debtors 308.6 295.9Properties for resale 0.2 1.1Cash & short term investments 33.9 53.0

Creditors & provisions (376.7 ) (342.9 ) Borrowings (135.7 ) (163.7 )______ ______

610.7 526.1Pension deficit (74.0 ) (103.2 )______ ______ Net assets 536.7 422.9______ ______Gearing 19.0% 26.2%

30 June 2004£m

30 June 2003£m


Pensions – balance sheet

Expected 30 Jun 2004Return £m

Equities 7.3% 156.0Gilts 4.6% 25.9Corporate bonds 5.1% 25.9

______Total fair value of assets 207.8Actuarial value of liability (313.5)______Deficit in the scheme (105.7)Related deferred tax asset 31.7______Net pension liability (74.0)______


Pensions – balance sheet

Pension deficit at 1 January (85.1)

Charge to profit and loss account (7.1)

Pension contributions 12.2

Experience 10.8

Taxation (4.8)

______Pension deficit at 30 June (74.0)

______

30 June 2004£m


Like-for-like free cash flow

Operating profit 109.3 94.8Depreciation 15.5 12.9 Profit on sale of fixed assets (0.3) (0.1)Movement in working capital 9.2 (0.9)______ ______Like-for-like cash flow from operations 133.7 106.7

Interest (3.4) (4.2)Taxation (26.9) (24.9)Replacement capital expenditure (18.1) (14.0)

______ ______Like-for-like free cash flow 85.3 63.6

______ ______

6 months30 June 2004

£m


£m


Like-for-like free cash flow

Like-for-like free cash flow 85.3 63.6Adjustment in respect of creditors - 16.6Dividends (19.0) (15.1) Expansion capital expenditure (14.1) (9.7)Acquisition of businesses (21.0) (6.4) Shares issued 0.6 0.8Special pension contributions (5.1) (0.8)

______ ______Increase in cash balances 26.7 49.0Net debt at 1 January (128.5) (159.7)______ ______Net debt at 30 June (101.8) (110.7)Loan notes and other borrowings (135.7) (163.7)

______ ______Cash and short term deposits 33.9 53.0

______ ______


£m


£m


Like-for-like free cash generation

0

10

20

30

40

50

60

70

80

90

2000 2001 2002 2003 2004

£m

Expansion capital expenditure Acquisition spend LFL Free cash flow



Net borrowings, gearing & interest cover

0

50

100

150

200

250

Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04

£m

0

10

20

30

40

50

60%

Net borrowings Gearing %

Interestcover 9 9 11 12 18 18 21 21 30


International Accounting Standards

• IAS 10 – Dividends • IAS 12 – Taxation • IAS 17 – Leases• IAS 40 – Investment properties• IFRS 2 – Share options• IFRS 3 – Goodwill


Frank McKay

Chief Executive


Travis Perkins

• Strategy

• Review of operations

• Industry outlook


Strategic intent

Earnings per share


Adjusted earnings per share

32.5p35.6p

43.5p

53.8p

63.8p

2000 2001 2002 2003 2004

Growth 9.5% 22.2% 23.7% 18.6%

Compound 5 year growth 21.9%



The Way Forward

• Brands

• Market share

• Acquisitions and brownfield openings

• Capital investment

• Continuous improvement


Products

Dry LiningInsulationPartitionsCeilings

Plumbing &

Heating

Civils

Tool Hire


Brands

HIRE


Market share

2000 2001 2002 2003 2004 5 Yr Target

Market share based on company estimates

12.9% 13.0%14.1%

15.5% 16.0%18-20%


Capital investment

Acquisitions 21.0 6.4Brownfield 3.1 3.0

______ ______Total acquisitions and brownfield spend 24.1 9.4Improvement capex 11.0 6.7

______ ______Expansion capital investment 35.1 16.1Replacement capex 18.1 14.6

______ ______Total capital investment 53.2 30.7

______ ______

Projected full year in excess of £100m including £13m brownfield


£m


£m


Acquisitions & brownfields

Travis Perkins 449 15 11 (3) 472

Keyline 65 - - - 65CCF 21 - - - 21

TP P&H 37 - - - 37

City Plumbing 128 4 5 (6) 131

Total branches 700 19 16 (9) 726

31 Dec Acquisitions BrownfieldsConsolidation 30 Jun2003 2004



30 Jun Acquisitions BrownfieldsConsolidation 6 Sept2004 2004

Travis Perkins 472 6 4 - 482

Keyline 65 3 - - 68CCF 21 - - - 21

TP P&H 37 - - - 37

City Plumbing 131 - 1 - 132

Total branches 726 9 5 - 740



£m

H1 2004 turnover of 35 additional branches toJune 2004 9

H2 2004 projected turnover from 49 additionalbranches 31

2005 projected turnover from 49 additionalbranches 25

____Total incremental turnover from 49

additional branches 65____

Total acquisition spend per £ of sales 51p



At 30 June 2004

Total branches 726



Additions to 30 June 2004

Travis Perkins 26City Plumbing 9

____Total additions 35


TP Blackburn


TP Ludlow


TP Tamworth


CPS Weybridge


Capital investment

IMPROVEMENTCAPITAL EXPENDITURE

• Property• Transport• Plant & equipment


Cardiff North – TP & CCF combined site


TP Northampton


Keyline Milton Keynes


Keyline Kingswinford


Capital investment

REPLACEMENTCAPITAL EXPENDITURE

• Property• Transport• Plant & equipment


Capital investment

£m

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004

Capital expenditure Depreciation



Travis Perkins

Continuous Improvement


John Carter

MD Operations


Growth

• Acquisition activity

• Brownfield openings

• Organic development


Growth

02468

1012141618

2001 H2 2002 H1 2002 H2 2003 H1 2003 H2 2004 H1 2004 H2

Brownfield openings Expected openings

Brownfield site openings


Growth


IT developments

• PC & system upgrades

• Chip & pin

• Broadband

• Hand-held terminals


IT developments



• Timber manufacturing

• Central distribution

• Transport efficiencies

• Innovative storage & handling


Marketing

• Branch launch activity

• Landscaping

• Bathroom showrooms

• Brand awareness


Marketing


CCF

• 2003 – a year of rationalisation

• Systems harmonised

• Business restructured

• Internal demand

• Positioned for growth


Plumbing & Heating

• Management team

• Harmonising systems

• Rationalisation

• Sourcing

• Positioned for growth


Plumbing & Heating


Customer service – “Excel”

• Central to our culture

• Refined and enhanced

• Remains a vital component


Summary

• Growth potential

• Modernising & investing

• Superior productivity

• Best-in-class performance

• Continuous improvement


Frank McKay

Chief Executive


Industry outlook

Short term

• Interest rates

• Housing transactions

• New build

Long term• Changing demographics

• Housing stock quality


Performance

• Cash flow

• Margins

• Return on capital

• Growth


Tim Stevenson

Chairman


Travis Perkins plc

Interim Results6 months ended 30 June 2004

83

travis perkins plc · travis perkins 449 15 11 (3) 472 keyline 65 - - - 65 ccf 21 - - - 21 tp...

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