Specialist
Former Director at Travis Perkins plc
Agenda
- Impact of the coronavirus pandemic on Travis Perkins (LON: TPK) and demand and supply of building materials
- Working capital management in a downturn
- Wickes carve-out and delay impact from the coronavirus crisis
- M&A opportunities in a downturn 5. Management changes and importance of trader experience
Questions
1.
What are your views on the UK building materials market and the impacts of the coronavirus pandemic? Taylor Wimpey and Redrow are coming back online and B&Q is opening stores. What are your expectations for when these openings might start to impact players such as Travis Perkins?
2.
You mentioned the normal residential and repairs opening up and the differences to the new builds. What key leading indicators would you monitor when analysing Travis Perkins and which would you tend to ignore?
3.
Who do you think Screwfix and Toolstation are going to be taking market share from? You mentioned the mitigated impacts as a result of having the direct delivered service.
4.
Is it mainly the independent merchants and trade and retailers that are closed through the coronavirus period?
5.
What proportion of total stores across the UK are run by independents that you would expect to be closed over the coronavirus period?
6.
Do you expect Travis Perkins, Screwfix and Toolstation to take market share from players that have branches closed, such as Covers?
7.
Can you give a rough indication to the kind of revenue impacts you are expecting over May-July?
8.
As the B&Q type stores open, would you expect the impacts on Screwfix and Toolstation to come into play?
9.
Would you expect an individual B&Q store to be operating at 100% sales or more, or less?
10.
What are your expectations for the pent-up demand coming through? Do you get a week or two of crazy rush and long queues that start to die down and go back to lower than normal sales?
11.
If Wickes was to open as well would you expect it to half share both customer bases? Given the limitation is more on the till side, will that reduction stay relatively flat?
12.
What is the amount of store sales that you are expecting to shift over to click and collect for this period?
13.
Do you get any margin impact from the shift to click and collect with fewer till staff?
14.
How much of the normal level employment base has Travis Perkins been able to operate on through the coronavirus period?
15.
Do you have a rough indication to portion revenue or EBIT from managed service for Travis Perkins?
16.
Could you give us a view on the breakdown between renovation, maintenance and improvement and how you are expecting that to change over the crisis as long as it continues?
17.
Can you describe the characteristics of the middle range type trade?
18.
How important are the middle range type tradesmen for Travis Perkins?
19.
Do you have a rough indication of the proportion of margin for t he middle range type trade that comes from this type of customer?
20.
Would you expect the 15% of profitability to have gone significantly up or down since then?
21.
Do you think these players will recover with a smaller number of tradesman and account for a smaller proportion?
22.
Do you expect the 10-40 type players to be relatively strong through the coronavirus period?
23.
Do you have any views on any significant gaps in Travis Perkins’ inventory availability due to issues in the supply chain? Would that be the same as what all competitors are facing?
24.
Would you expect the Wickes sale to go as originally planned pre-coronavirus or would you expect a significant delay?
25.
What do you think are the key risks in the valuation of the Wickes asset? Do you think there will be potential for a supportive market in H2 2021 for the valuation?
26.
Could you outline how important trading expertise is in senior management and what Travis Perkins has been able to do utilising John Carter’s experience as CEO?
27.
How much more important do the relationships with suppliers become for individuals in companies such as Travis Perkins, if we consider the broader shift of Travis Perkins’ suppliers’ consolidation and the rough shift of power away from distributors towards manufacturers?
28.
By access to stock, do you think there’s potential to not have enough stock?
29.
You mentioned access to stock and the credit terms. Does this also play into pricing negotiations and YoY pricing increases?
30.
How significant do you think John Carter’s impact will have been on the rebates and the pricing?
31.
Why does John Carter have such strong relationships with suppliers?
32.
How do you think about CEO Nick Roberts’ trading experience and position in Travis Perkins?
33.
Do you have any views of Travis Perkins acquiring perhaps any of these independent builder’s merchants through this downturn?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary 48 hour week trial
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
