Woodie’s owner Grafton has no focus on UK rival

Building materials business and Woodie’s DIY owner Grafton Group is understood not to be interested in any assets being put up for sale by its UK rival Travis Perkins. Travis Perkins, the UK’s largest building materials group, plans to sell its plumbing and heating division, and said it could divest its Wickes home improvement chain in the future.

The group, which operates over 20 brands, said in a strategy update that it would simplify its structure and streamline its cost base, concentrate more on its trade businesses, and improve the performance of consumer-focused Wickes.

It said it would review options for maximising the value of Wickes in the medium term, meaning a sale could be on the cards.

Dublin-based Grafton generates more than 90% of its annual revenues from its UK builders merchanting business.

It is understood, however, that it would favour organic growth from its Selco and Plumbase UK subsidiaries, both of which trade in the plumbing and heating sphere, than look for a further acquisition.

Cantor Fitzgerald analyst Darren McKinley said Grafton would be far more likely to seek acquisitions in mainland Europe than “double-down” in the UK, where there is so much market uncertainty at present.

Grafton also has operations in the Netherlands and Belgium. In August, chief executive Gavin Slark said the group could look at new areas.

Travis Perkins said disposal of the plumbing and heating division would allow more focused management attention and capital deployment on the trade business.

It said the long-term growth drivers of the business were robust, with a continued shortage of housing in the UK and under-investment in the maintenance and improvement of the existing, ageing, housing stock.

In the shorter term market conditions remained uncertain, impacting secondary housing market transactions and consumer confidence.

Travis Perkins is targeting further annualised cost savings of €28m, in the next 18 months.

Additional reporting Reuters


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