Travis Perkins to sell plumbing and heating division and seek £30m in savings
The firm plans to focus on serving trade customers.
Wickes owner Travis Perkins is to offload its plumbing and heating division and extend a cost-cutting programme as it targets savings of up to £30 million amid a challenging DIY market.
Travis said on Tuesday hat it will explore the sale of its plumbing and heating arm as part of a simplification programme which will see the firm focus instead on serving trade customers.
“This will facilitate more focused management attention and capital deployment on the higher returning areas, and creates further opportunities to simplify the group and reduce costs,” it said as part of a capital markets day.
Travis will also maintain a focus on efficiency by seeking further annualised cost savings of £20 million to £30 million over the next 18 months.
Cuts will affect the firm’s head offices, IT department and distribution cost base.
Boss John Carter said: “We have developed a clear plan to focus on delivering best-in-class service to our trade customers, and to simplify the group to reduce complexity, speed up decision-making and reduce costs.
“Our trade businesses hold strong positions in attractive markets, and these initiatives will enable us to concentrate our management time and capital in the highest returning areas.”
The firm also said it will “look to review the options for maximising the value” of DIY chain Wickes in the medium term.
Shares in Travis Perkins dropped more than 3% to 1,065.5p in morning trade.
Travis has previously pledged to take costs out of the business and improve efficiency as poor consumer confidence and a subdued property market have weighed on demand for DIY products.
The group took a £246 million writedown as a result and launched a hefty cost-cutting programme which saw its head office workforce slashed by a third in May, while it is also controlling branch staffing levels to match trade.