Travis Perkins plc
Address:
Lodge Way House
Harlestone Rd.
Northampton NN5 7UG
United Kingdom
Telephone: (+44) 1604-752-424
Fax: (+44) 1604-587-244
http://www.travisperkins.co.uk
Statistics:
Public Company
Incorporated: 1988
Employees: 7,000
Sales: £874.3 million (US$1.31 billion) (1999)
Stock Exchanges: London
Ticker Symbol: TPK
NAIC: 444190 Building Materials Supply Dealers
Company Perspectives:
To be the most successful company in supplying Timber, Building Materials and Tool Hire from a network of trading branches. Goals: Market Leadership and Financial Strength: To maximise market strength through profitability whilst offering optimum returns on investment. Service and Value for Money: To establish Travis Perkins as the name most renowned for superior service and value for money. Customer Care: To surpass competitors in the anticipation and satisfaction of customer needs. Employment Standards: To maintain exemplary standards within the working environment that attract and retain employees who share a mutual interest in the success of the company. Environment Commitment: To pursue business with respect for environmental concerns locally, nationally and internationally. To achieve these goals we must guarantee: an exceptional, professional level of service and customer care; a continuous programme of service and product training for employees with regular personal appraisals; that customers are made aware that Travis Perkins recognizes their importance and value; to actively investigate and act upon the changing needs of customers; that all communications present a consistent and distinctive corporate identity and character; to cultivate a management style which encourages team work and recognizes change as an opportunity; to sell goods of a proven merchantable quality; to continuously appraise product quality and range, to reflect the requirements of our customers.
Company History:
Fast-growing Travis Perkins plc ranks as one of the top three building materials retailers in the United Kingdom, alongside rival Meyer International and behind longtime leader Wolseley. Travis Perkins operates more than 450 branch stores throughout the United Kingdom, under the trade names Travis Perkins Trading Company, Keyline, and D.W. Archer. In all, Travis Perkins' stores stock more than 60,000 items for a customer base drawn almost exclusively from the small builder market. As such, the company has avoided entry into the DIY consumer market. About 50 percent of the company's sales come from building materials and tool rentals; sales of woods contribute another 25 percent of Travis Perkins' annual revenues, while plumbing and heating systems and supplies round out the remainder of the company's sales, which neared £875 million in 1999. Travis Perkins' chain of D.W. Archer stores specializes in the importing, machining, and sales of softwoods, with a focus on wood roofing products. Travis Perkins has joined wholeheartedly into the consolidation of the U.K.'s building materials market. The company has doubled in size since the mid-1990s; in 1999 alone the company made some 18 acquisitions, including that of Keyline, from the CRH Manufacturing Company in Ireland, adding more than 100 Keyline branch stores, and the 38-store chain of Sharpe & Fisher stores, primarily located in southwest England. The addition of multilingual Frank J. McKay as company chief executive in 1999 suggests that Travis Perkins is ready to make the leap from its concentration on domestic operations to becoming an international company for the new century.
18th-Century Origins
Travis Perkins itself was the result of a series of significant mergers, which allowed the company to trace its roots back to the late years of the 18th century. One of the company's earliest components was founded in 1797, by Benjamin Ingram, a carpenter, on Beech Street in London. For most of the first half of the next century, the Ingram company operated principally as joiners and carpenters. The changing consumer furniture tastes, from furniture crafted from elm and oak to mahogany, led Ingram to begin supplying hardwoods to third-party joiners and carpenters. This activity in turn led the Ingram company to join with a competitor, operated by the Perkins family. The resulting company was renamed Ingram Perkins, a name it maintained until the 1970s.
Ingram Perkins continued to grow through the 20th century, adding to its number of branch stores in a series of acquisitions. The company's biggest acquisition came in 1970, when Ingram Perkins merged with Sandell Smythe & Drayson--which had been founded in 1785--combining the companies' names under the single banner Sandell Perkins. Sandell Perkins went public in 1986. Two years later, during a consolidation wave then sweeping the United Kingdom's building materials industry, Sandell Perkins merged with Travis & Arnold, of Northhampton.
Travis & Arnold had been founded by Ernest Travis in 1899. Originally operating in London, the company moved to Northampton in 1904. The Midlands became the company's core market, while later expansion took Travis & Arnold into the southwest of England as well. Travis & Arnold's original focus was on the timber and wood products supply side. In the later half of the 20th century, however, Travis & Arnold began to expand its product line, moving into building materials and plumbing supplies. After going public in 1964, Travis & Arnold began making acquisitions, primarily of regional building materials merchants, such as Page Calnan, Kennedys, and Ellis & Everard's building supplies division. Helping to lead the company was Tony Travis, the grandson of the company's founder.
Sandall Perkins and Travis & Arnold merged in 1988. The resulting company, renamed Travis Perkins plc, boasted a nationwide network of more than 150 stores. Tony Travis took on the dual roles of chairman and chief executive officer. The newly merged company ran headlong into trouble--by the end of the 1980s, the U.K. building market had collapsed. As the country entered into the extended recession of the 1990s, Travis Perkins began to struggle, and by 1991 the company was forced to restructure its operations, taking steps that included the slashing of some 13 percent of its total employees.
Acquisition Drive in the 1990s
Yet the recession and building slump also spelled opportunity for the company. As its smaller rivals faltered, Travis Perkins and its larger competitors, including Meyer International and Wolseley, launched a drive to consolidate the highly fragmented building materials supply industry in the United Kingdom. In 1992, Travis Perkins made its first new acquisition, picking up Ashton Vernon. In 1994 the company added the 46-store chain of AAH building materials stores; the following year it added the 26-store chain of BMSS building materials merchants. With more than 214 branches after the AAH merger, the company had taken a place among the top five in its industry.
1797:Benjamin Ingram is founded as a carpentry/joiner shop.
1850s:Ingram adds hardwood sales to third parties and is renamed Ingram Perkins.
1899:Travis & Arnold is founded.
1964:Travis & Arnold goes public.
1970:Ingram Perkins merges with Sandell Smythe & Dawson and is renamed Sandell Perkins.
1986:Sandell Perkins goes public.
1988:Sandell Perkins and Travis & Arnold merge to form Travis Perkins.
1990s:Company embarks on a period of key acquisitions.
2000:Travis Perkins announces plans to add 100 new branches before 2002.
With nearly 4,000 employees by 1996, Travis Perkins took a breather from its acquisition drive, while working on integrating its newly acquired operations. The Ashton Vernon, AAH, and BMSS trade names, initially kept in service, were phased out, as stores were converted to the Travis Perkins Trading Company signage. The upturn in the economy beginning in the mid-1990s gave new impetus to Travis Perkins' growth. By the end of 1997, the company was back on its acquisition trail, most notably with the December 1997 purchase of W.H. Newson Holding Limited, and that company's seven-branch timber and builders materials supply stores based in the London area. The company's sales for the year neared £269 million, for net profits of £22 million.
The following year saw Travis Perkins step up its expansion campaign. In January 1998, the company acquired Winser Limited, a drainage merchant specialist operating in North London; two months later, Travis Perkins acquired seven timber and building materials stores as well as two rafter manufacturing facilities when the company purchased Sherry & Haycock. At the same time, the company was preparing an additional acquisition, that of Direct Building Products Limited, completed by the end of March 1998. Together with the company's organic growth--generated through a buoyant market for new housing--Travis Perkins' new acquisitions helped boost the company's revenues to £623 million for the year.
Throughout 1998, Travis Perkins continued making small-scale acquisitions, adding a total of 13 new acquisitions in that year. Yet, the company was already preparing an acquisition on a far larger scale that was to boost it to a solid place among the United Kingdom's top three building materials suppliers. That acquisition came in April 1999, when Travis Perkins announced that it was buying Keyline Builders Merchants, the U.K.'s number five builders' merchant, for £181.5 million. The Keyline acquisition, from CRH of Ireland, added more than 100 new branches, located primarily in the northeast of England and Scotland, complementing Travis Perkins' midlands and southern strengths.
Six months later, Travis Perkins added a new trophy, when it acquired the 38 branch stores of Sharpe & Fisher plc. The company completed the year with the addition of Baseline Building Supplies Ltd., adding that company's four Devon-area branch stores. While announcing its intention to slow down the pace of new acquisitions, in order to integrate the Keyline and Sharpe & Fisher operations, Travis Perkins also announced that it had taken on CEO Frank J. McKay, formerly of Blueline. McKay's international expertise was expected to aid Travis Perkins as it faced an impasse in the mature U.K. market. With few growth chances left in its home market, Travis Perkins was beginning to see a need to establish itself as an internationally operating company.
The absorption of the Keyline and Sharpe & Fisher operations proved easier than initially forecasted, allowing Travis Perkins to return its attention to the business of growth through acquisition. While large-scale acquisition prospects in the United Kingdom had become scarce, the company looked forward to the addition of a number of small-scale purchases, including two made in January 2000 which boosted its network to more than 465 stores. By March 2000, the company was able to announce its plans to increase its position in the U.K. market by an additional 100 stores before the end of 2002. The market also appeared favorable for organic growth, with suggestions that the company might consider opening a number of 'greenfield' stores in the early years of the new century. Closing out its 1999 year with sales of nearly £875 million, Travis Perkins had built a solid foundation for its future growth.
Principal Subsidiaries: Travis Perkins Trading Company Limited; D.W. Archer Limited; Travis Perkins (Properties) Limited.
Principal Competitors: Caradon plc; Meyer International PLC; RMC Group p.l.c.; Wolseley plc.
Further Reading:
Anderson, Simon, 'Builders' Merchants Trio Tighten Market Grip,' Daily Telegraph, October 26, 1999.
Clark, Andrew, 'Travis Perkins Stacks up the Ballast,' Daily Telegraph, October 26, 1999.
Trefgame, George, 'Travis Perkins Lifts Profile with Keyline Acquisition,' Daily Telegraph, April 29, 1999, p. 67.
------, 'Travis Perkins Profits Build Up,' Daily Telegraph, March 10, 2000.
------, 'Travis Perkins Still Buying,' Financial Times, March 10, 2000.
Source: International Directory of Company Histories, Vol. 34. St. James Press, 2000.
