Travis Perkins suspends dividend and delays Wickes de-merger
Builders’ merchant Travis Perkins has suspended its dividend due to coronavirus uncertainty.
The company also announced its intention to delay its long planned de-merger of DIY retailer Wickes.
However, the group announced in its trading update a strong balance sheet with cash deposits of £185m.
Boss Nick Roberts said: “Our highest priority is the health and safety of our colleagues, customers, suppliers and all other stakeholders, and we have taken decisive action to mitigate the risks we are facing as a business, and implementing contingency plans across the group.”
The planned de-merger dates back to 2018. Travis Perkins planned to spin off Wickes to focus on its core business.
According to the update, Travis Perkins has met its trading targets so far in 2020 as total group sales grew 2.4 per cent in the year to date.
Sign up to Morning Wire’s Midday Update newsletter, delivered to your inbox every lunchtime
However, it also stated the situation will change rapidly due to coronavirus uncertainty.
Shares in the firm jumped 10.5 per cent to 768p as Travis Perkins sought to reassure investors on the state of its balance sheet.
“Whilst there is unprecedented uncertainty on how the virus outbreak will directly impact our markets and our businesses, we enter this period from a position of strength and security, with a strong balance sheet and access to significant committed liquidity,” Roberts added.
Retailers particularly exposed to coronavirus
Retail is one of the most vulnerable sectors exposed to the crisis with firms being hit by the reduced number of customers as they self isolate.
Earlier this week, fashion chain Laura Ashley filed for administration.
Marks & Spencer, Wetherspoon and Mike Ashley’s Frasers Group all followed with profit warnings today.
And chancellor Rishi Sunak announced a series of measures earlier this week.
These included £330bn in emergency loans, grants for retailers and the cancellation of business rates.
He is due to set out further government support later today.