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Toolstation reports falling profits in ‘challenging’ 2022 as costs and investments rise

Toolstation has seen sales slow while costs have risen. Image: Bjoern Wylezich/Shutterstock

Toolstation had a challenging 2022 as costs, including investment in a new online distribution centre, rose and both like-for-like sales and profits fell.

The DIY and trade tool retailer slowed the pace of store rollouts during the year, given the wider economy, but its parent company Travis Perkins says that the 268 new branches opened since 2017 “have the potential to add over £300m of revenue over the next five years”. This year it plans to open about 10 UK branches.

During the year it put £28m into a Northamptonshire 500,000 sq ft distribution centre that “incorporates automation technology and will initially provide the capability to fulfil direct to customer orders”. It says the new facility is expected to be in operation by the second half of this year and is “an important strategic investment both to support revenue growth and increase operational efficiency”. 

Toolstation total revenues of £775m for 2022 were 1.9% higher than the previous year – but 3.7% down on a like-for-like basis that strips out the effect of store openings and closures. During the year, Toolstation opened a net 33 UK stores, taking it to a total of 563, and a net 35 stores in Europe, outside the UK, where it now has a total of 158. Its UK adjusted operating profit came in at £21m, half the £42m it reported a year ago. Losses in Europe grew to £30m taking it to a total adjusted operating loss of £9m, from an adjusted operating profit of £22m last year.

The figure come as parent company Travis Perkins today reports revenues of £4.99bn in the year to December 31 2022. That’s 8.9% up on the same time last year. Pre-tax profits of £192m are down by 20.3% on last year. 

Travis Perkins chief executive Nick Roberts says: “Whilst it is early in the year and macroeconomic uncertainty remains, the combination of our diverse end market exposure, appropriate cost actions and further market share gains driven by continued strategy execution, will enable the group to deliver another resilient trading performance in the year ahead.

“As a market-leading distributor of building materials products, we continue to benefit from long-term strategic growth drivers in our markets including new environmental and safety legislation and commitments from both public and private sector customers to deliver against net zero targets. We are committed to being at the forefront of both decarbonising the construction industry alongside developing the next generation of talent to create value for all of our stakeholders.”

Toolstation is a Leading retailer in RXUK Top500 research

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