Very good morning to you all, and thank you for joining us, and welcome to our first virtual results presentation. Alan and I are here in Northampton for only the second time since March 18th. After my introduction and sharing a few thoughts, Alan will talk through the financial performance of the group. Then I will return with an operational and strategic update and look forward. The first half of 2020 was one marked by progress despite the challenges of the COVID pandemic. We've all been impacted by COVID, and Travis Perkins and the Travis Perkins family has been no different, the company as a whole, plus all our valued colleagues and their families. The challenges we've had to overcome have been extraordinary. Arguably, this has been the most tumultuous period in our over 200-year history.
The measure of success for me, of how the crisis has been navigated, is not only about how and what decisions and moves we have made to operate through the lockdown and beyond, but actually how the culture of the business has stood up to the test, and how we've harnessed that culture and the moral compass to adapt the business to be flexible and agile, and ensure that we not only survive whatever befalls us, but actually, we came out stronger and better prepared to outperform our markets. Clearly, there's been a significant impact on the performance of the Travis Perkins Group, with a 20% drop in sales, which has led to a drop in profitability in the first half. That's only half the story, though.
Like many businesses, we've worked very hard on our cash and liquidity management with real success and strong cash inflow, and as Alan will outline, a positive impact on our net debt position. Later on, I'm going to talk you through the phases of how we adapted to the rapidly changing environment that we all found ourselves in, pivoting our businesses to digitally enabled contactless operations very quickly, all the while continuing to serve our customers and provide them with the essential services that they need, being involved in the construction of the new NHS Nightingale Hospitals, as well as ensuring the critical infrastructure of the country remained operational and our homes remained warm and dry. As a business, we just simply didn't stop there.
It was very clear that our customers and we needed to change the way that we worked in order to access the materials that they needed. We moved at pace as a group to accelerate the strengthening of the core of our business to develop and improve our proposition for our customers. These changes stand the group in good stead for the future, not just to trade through the crisis, but actually as a platform for future growth. We've made some great strides forwards, and whilst there's still a huge amount to do, as I'll delve into later on, the business is strongly placed to outperform its markets. Firstly, over to Alan.
Thank you, Nick, and good morning, everyone. Before I take you through the detailed financials, I thought it might be helpful to remind you of some of the presentational aspects of our 2020 interim results, which should be borne in mind. Firstly, in terms of portfolio changes, Toolstation Europe has been fully consolidated since the 1st of October 2019, whereas we had previously accounted for the business as an associate company. At the end of January 2020, we completed the disposal of the wholesale plumbing and heating activity, PF&P. Wickes is included in 2020 and in all comparatives, as the demerger was placed on hold in March. In terms of impacts of the pandemic, these are included in the underlying adjusted operating profit as presented. I will try and highlight the details of some of these impacts as we walk down the income statement.
We have, however, presented the costs of the significant restructuring announced in mid-June as an adjusting item, given its nature and its quantum. Turning to the financial highlights. After an encouraging start to the year, with 2.4% revenue growth in the 11 weeks to the 18th of March, the impact of the pandemic and then lockdown was profound. Revenue for the half declined by 20.2% to GBP 2.78 billion and declined by 19.3% on a like-for-like basis. Given the fixed cost base of the business, the revenue decline had a significant impact on group profitability, resulting in an adjusted operating profit of GBP 42 million versus GBP 220 million in H1 2019. The group recognized adjusting items of GBP 129 million, principally the significant business restructuring program we announced in June.
Adjusted earnings per share fell to GBP 0.014 per share, while basic EPS fell to a GBP 0.457 loss, with the difference primarily driven by the cost of the restructuring program. On the positive side, cash generation in H1 2020 was extremely strong, reflecting the group's focus on liquidity management throughout the pandemic. The group's covenant net debt position fell by GBP 322 million from the position at the end of December 2019 to GBP 22 million and by GBP 392 million from the position at the end of June 2019. Given the ongoing level of uncertainty in the U.K. economy and the group's end markets, the board is not proposing the payment of an interim dividend.
The board recognizes the importance of dividends to shareholders, and so will keep this position under review, taking into consideration the trading environment in the group's end markets and the ongoing liquidity position, and will provide a further update in due course. On slide eight, I've broken out the monthly revenue trends by reporting segment, and have also split out Wickes' core DIY and kitchen and bathroom showroom elements. As you can see, Toolstation has delivered a consistently strong performance throughout the half. While the lockdown had a significant impact on Wickes, you can see how quickly core DIY recovered, reaching growth of almost 50% in June. Kitchen and bathroom revenue was close to zero during April and May as home installations were on hold during the lockdown. Since that time, both delivered sales and orders have recovered well, and leads remain encouraging.
The merchanting and plumbing and heating segments show similar like-for-like patterns, albeit plumbing and heating has remained weaker overall given the slower return of work in the home. Both segments remained open during lockdown for essential works, and have gradually recovered month by month since April. Within merchanting and plumbing and heating, impacts differ by business unit depending on their predominant end markets. Of note, both commercial and new build continue to lag while RMI is relatively stronger. Across the group, like-for-like sales trends in July and August have returned to close to prior year levels, supported by domestic RMI and current strong trading in consumer DIY markets. If we now look at the drivers of the 20% decline in revenue, as you would expect, this is virtually all driven by volume. Overall changes in pricing were modest in the period and were offset by mix.
Changes in the portfolio and branch network resulted in net reduction to revenue, with the disposal of PF&P and the branch closures in June more than offsetting the contribution from Toolstation Europe and new branches opened in the previous 12 months. There was one additional trading day in the period as well, contributing GBP 21 million to revenue. Year-on-year, the gross margin percentage at total group level was unchanged, and this despite the impact of the pandemic. Given the unprecedented circumstances in the period, there are a number of moving parts below the surface, which I think you'll want to understand. Firstly, there are some negative impacts due to the pandemic. These are, one, a reduction in anticipated annual volume rebates from suppliers given the significantly lower stock purchases in the first half.
Two, a higher proportion of customer orders delivered, particularly in merchanting, and three, an inefficiency in our supply chain operations due to distancing and other measures to ensure the safety of our customers. The second key factor is a small fall in margin within certain segments due to sales mix. For example, in merchanting, heavy side volumes have held up better than light side. In Toolstation and Wickes, we have experienced some drag from the strength of DIY and also seasonal sales as consumers have undertaken jobs in and around the home and particularly in the garden during Q2. Conversely, in plumbing and heating, we've seen a positive customer mix, with installer sales holding up better than contract volumes. A third factor is the overall segmental mix.
Both Toolstation and Wickes are higher gross margin businesses than merchanting and plumbing and heating. This factor outweighs the two earlier factors I described. At this stage, it is quite difficult to predict how the second half will unfold. I would expect a broadly unchanged gross margin overall year-on-year. With such significant effects from the pandemic, you would also expect there to be a number of complex moving parts below the gross profit line. Some of these will prove to be predominantly H1 items. We would expect some reversals in the second half. On slide 11, I've tried to bridge the H1 2019 operating profit to H1 2020. You can see that of the GBP 178 million fall in EBITA, GBP 202 million is from the gross profit line, given the lower volumes, meaning that overheads overall have positively contributed.
If we unpick that overhead movement of a net GBP 24 million positive, you can see the following elements. Firstly, government assistance of GBP 65 million, with GBP 45 million from the furlough scheme and GBP 20 million from the business rates holiday. As at end June, virtually all colleagues who have been furloughed had returned to the business, meaning there will be a negligible contribution in H2. On the other hand, the business rates holiday will run until March 2021, and we'll expect around GBP 40 million of benefit in the second half. Overhead related inflation and movements in central costs of GBP 20 million, together with GBP 12 million of investment in growth, principally driven by the Toolstation branch opening program. There are GBP 9 million of losses in Toolstation Europe, now fully consolidated.
We've realized GBP 25 million of overhead savings in the half, which is a combination of prior year overhead reduction initiatives and savings made since lockdown. I'll cover future savings from the restructuring program announced in June on the following slide. Within provisions and accruals, it's important to note we recognized additional charges due to the impacts of the pandemic, in line with our accounting policies. Of these, I would expect a number to unwind in part in the second half, and we've estimated these reversing items at around GBP 20 million. The amount's composed of three main items. One, holiday pay accruals, as colleagues have taken fewer days leave in the first half than their entitlement. Secondly, an increase in debtor provisions under IFRS 9, and thirdly, increased provisions for slow-moving stock given lockdown.
The final element of the bridge is a year-on-year reduction in property profits of GBP 5 million, given lower completions in the period. Turning to the restructuring program, as you'll recall, we announced a significant restructuring program on the 15th of June. The program takes into account the lower volume outlook, given the economic conditions, and is designed to help mitigate the anticipated fall in gross profit contribution from the recession. Around 165 branches have been closed, primarily in the trade merchant businesses, including plumbing and heating. Together with selling in administrative roles across the businesses and also in corporate functions, the total targeted reduction in roles is around 2,500, roughly 9% of the workforce. In terms of cost savings, the program is expected to deliver an annual reduction in overheads of approximately GBP 120 million.
As the vast majority of actions were put in place by the end of August, we would expect to deliver a material saving in the balance of 2020. While an adjusting item of £111 million has been recognized in the income statement, the gross cash costs of the program are around £85 million, of which approximately £35 million will be incurred in 2020. The remainder, which will be incurred over future years, relates primarily to leasehold property payments and should be offset by sales of freehold sites closed as part of this program, and also, hopefully, reduced by finding sublet arrangements. I'll now turn to performance by reporting segment, starting with merchanting. After an encouraging start to the year, the segment was, of course, heavily impacted by lockdown.
Around one-third of branches remained open during late March and April as the business pivoted to focus on essential projects only, including, as Nick mentioned, support to build the network of NHS Nightingale Hospitals and to maintain key infrastructure. Branches progressively reopened from late April onwards to support the steady recovery in construction end markets. The recovery has been strongest in domestic RMI markets, with the Travis Perkins general merchant recovering most quickly, and the specialist merchants with a greater exposure to new house building and commercial construction lagging somewhat as customers ramp up more slowly. Despite good control of discretionary costs and government assistance received, the fixed cost nature of the branch network, together with gross margin pressure from reduced annual volume rebate expectations and the COVID-related inefficiencies I referred to, resulted in a 75% decline in operating profit.
As I mentioned previously, the restructuring program is concentrated in the merchant businesses. In the merchanting segment, 140 branches were closed by the end of June. These closures, together with the restructuring of sales and above branch support teams, are expected to generate around GBP 90 million of annualized cost savings in the merchanting segment. Moving to Toolstation, the business has continued to deliver outstanding growth, outperforming their respective markets. Despite the disruption of lockdown, Toolstation UK delivered like-for-like revenue growth of 12.9% as it rapidly adapted its business model to run the branch network as click-and-collect fulfillment centers, and also ramped up home delivery capability. As you would expect, distancing measures and the adaptation of the business model resulted in higher operating costs in the period in the U.K. operation, hence the fall in operating profit from GBP 13 million to GBP 10 million in the U.K.
While lockdown resulted in a pause in the branch opening program, with only nine new branches in the U.K. in the half, we remain committed to the plan to open 60 new branches in the year. Nearly all of these sites are already identified. We opened 19 new locations during July and August. In Europe. The impact and timing of lockdown was, of course, different from the U.K., but the Toolstation proposition clearly responds well to customer needs with its multi-channel capability, its high stock availability, and outstanding value. Total sales in the Netherlands and Belgium grew by 79% and by 56% on a like-for-like basis. In France, total sales grew by 74% and by 61% on a like-for-like.
Although the branch network expansion is behind the plan for the year, eight new branches were opened in Europe in the first half, with further openings in Netherlands, Belgium, and France all planned for the second half. As disclosed previously, the additional operating costs of the European businesses will lead to the consolidation of around a GBP 20 million loss for 2020, of which GBP 9 million was recognized in the first half of the year. Like Toolstation, Wickes also demonstrated its integrated digital capability and its ability to adapt rapidly to market conditions. From the end of March to mid-May, Wickes stores operated as fulfillment centers for click-and-collect orders, alongside direct-to-home deliveries from the distribution network. Stores reopened to customers in late May, driving an acceleration in DIY sales as the trend for consumers to carry out DIY projects continued strongly.
In June, overall like-for-like growth was 22%, despite kitchen and bathroom sales not recovering fully, with core DIY sales up nearly 50%. For the half, despite lockdown, core DIY delivered like-for-like growth of 6%, while the kitchen and bathroom showroom business declined by 40%. Gross margins were essentially flat year-on-year, with a mix shift towards DIY from K&B, or kitchen and bathroom, showroom sales offset by reduced promotional activity in the DIY categories through the busy spring bank holiday period. As with other segments in the group, the retail businesses delivered good control of overheads, and this will be further underpinned by the June cost savings program. However, given the fixed cost base of the store network, operating profit declined to GBP 32 million in the period. During lockdown, sales in the plumbing and heating segment reduced to around one-third of prior year levels, similar to the other trade-focused businesses.
The recovery in sales has generally been slower than for the general merchant business, driven by a slower recovery in new house building, a more gradual return to activity in the social housing sector, and a careful return to operating in customers' homes by larger contract installers. Gross margins were stable, with the impact of lower annual volume rebates offset by the shift in sales mix towards smaller installer customers and the positive business mix change following the sale of the PF&P wholesale business in January. While absolute overhead costs reduced, the significant drop in volumes drove an operating loss for the business of GBP 8 million in H1. As part of the restructuring program, 16 plumbing and heating branches were closed in June, alongside a streamlining of above-branch activities. This is expected to generate around GBP 25 million of annualized cost saving.
Turning to cash and debt, as I mentioned earlier, our cash performance in the half was outstanding, with the generation of GBP 305 million of free cash flow before property transactions, and this despite the significant fall in operating profit. As you can see, the major contributor was the significant inflow in working capital. Inventory reduced by GBP 154 million as stock purchases were reduced, and inventory was also moved around our network. Receivables reduced by almost GBP 400 million, given the contraction in credit sales during Q2. Our credit teams, in conjunction with branch and sales colleagues, have done an absolutely outstanding job throughout lockdown in collecting receivables. Given reduced stock purchases, trade creditors also reduced during the period. In other creditors, the balance was assisted by the deferral of VAT payments due from between March to June to March 2021. This totaled approximately GBP 100 million.
On slide 18, looking at the group's capital expenditure, base CapEx totaled GBP 47 million. This was only modestly lower than H1 2019, as there was a significant capital accrual at the end of December 2019, paid in Q1, and as a number of Wickes refits had already been completed prior to lockdown. New capital commitments were constrained from March onwards and so expect to see lower cash CapEx in the second half, despite the Toolstation branch expansion program. Given the exceptional free cash flow generation, the business delivered a significant reduction in net debt. This was also aided by the GBP 50 million inflow at the end of January from the disposal of PF&P and by the suspension of final dividend for 2019. Covenant net debt was a modest GBP 22 million, with reported net debt, including leases, also some GBP 400 million lower.
During May, we prudently agreed a relaxation of covenants at the end of June and December 2020. We also chose not to put in place additional facilities. As at the 30th of June, the group had liquidity headroom of GBP 855 million, composed of the undrawn revolving credit facility of GBP 400 million, and cash on deposit of GBP 455 million. This position strengthened further during July and August by approximately GBP 100 million. Given the uncertain outlook, we intend to maintain a very strong headroom position. If I look ahead, the long-term fundamentals of our end markets remain robust, with ongoing demand for new housing and underinvestment in residential RMI. Since lockdown was lifted, we've seen a good recovery in the construction sector, with strong RMI and DIY demand continuing.
While secondary housing transactions have been strong since lockdown, it's not yet clear whether this is a sustained trend or a release of pent-up demand. We also welcome the government stimulus package for U.K. construction. Given our broad end-markets exposure, we are well-placed to service this demand. The near-term outlook for the economy is, however, very uncertain. An increase in unemployment will undoubtedly have a detrimental impact on consumer confidence. We therefore remain cautious on the volume outlook for building materials in the near term. We believe the group remains very well placed to continue to outperform its markets and generate value for shareholders. With that, I'm now going to hand you back to Nick for the operational review and strategic update. Then I look forward to taking questions with Nick later.
Well, thank you very much, Alan, and welcome back. I'm planning to talk you through three sections today. Starting with the group's immediate response to the pandemic and how I and my leadership team approached the challenges that presented themselves very quickly. We were all obviously in completely uncharted territory. As I mentioned earlier, this crisis period has been a lot more than about survival for the group. It's been about how we accelerate our plan to improve our business and utilize wisely our people and resources to advance and improve. I plan to give you some examples of how we, as a group, have done that and what we've achieved, and how the culture and the people within our business have pulled together to achieve some remarkable feats in what has been a very short but a very stressful period for everyone.
Finally, and I think more importantly, I'd like to talk briefly about how we're looking to the future. If the pandemic has taught us one thing, it's that our end markets really are changing, and that our customers will respond and indeed actively seek different ways of working with us. These structural changes are a huge opportunity for us to develop and grow our business. I don't have a future strategy to share with you today, but I do have a framework for how we're thinking through these opportunities and challenges and some different time horizons that we're looking to. What has COVID meant for TP? Well, the answer, of course, is lots of things. Let me break it down for you in the way that we approach this as a leadership team.
As we broke it down into three phases, the first thing to note, and this has always been stressed, is that whatever the decisions we've made at whatever point, the absolute number one priority has been the safety and well-being of our colleagues. The first phase of the pandemic for TP really started way pre-lockdown back in January as we started to look at the security and the impacts on the supply within our Far East supply chain. Of course, as lockdown hit places like Wuhan and China more generally, we began to think about and operationalize looking after our colleagues in our Shanghai operation. We started to think carefully about how we could and would mobilize our colleagues to work remotely, and then how we would do that fast and at scale and ensure everybody could work should the pandemic affect the U.K.
We call this getting out in front of the issue, and we started work on it very easily. It was no easy task. Come early March, just after we spoke to you last, we mobilized thousands of colleagues to home working very quickly. That necessitated some really quite highly complex processes around credit management and taking payment over phone to home working very quickly and at real scale. The second phase was lockdown itself, and we used our voice with government immediately to position ourselves as an essential service through lockdown so the business would not close. As Alan said, we supported the rollout of the NHS Nightingale Hospitals, which was incredibly important to us.
We continued to support infrastructure projects. Of course, we made materials available for the continued support of domestic maintenance at a time when we really needed to keep critical infrastructure operational and our homes warm and dry in a period of great national need. We really established our role as an industry leader, being primary in developing safe working practices very quickly with the government, for the government, with construction industry leaders and peers. We immediately pivoted our business to what we called our service light model. Branches were closed to customers. They pivoted to being fulfillment centers for delivery where there was no contact with customers to keep our people safe. Indeed, we moved to remote telephony-based or digital contact solutions, as Alan mentioned. We simply did not shut our branches and stores. We pivoted our model. We did so instantly.
With a third of our merchant branches closed and operating contactless models, Toolstation and Wickes pivoted to nearly 100% of digital operation. We had a short but a very challenging peak with 15,000 of our colleagues on furlough, we treated them with great dignity, fairness, and respect, we kept them motivating by using video and home working methods. Those colleagues returned rapidly. We moved, as lockdown started to ease, from having within our TP General Merchant 130 branches open to more than 600 branches open in less than a week. As Alan mentioned, throughout all of this, we kept a really tight focus on cash and liquidity, ensuring the viability of the business however the crisis panned out, and of course, the future looked very uncertain at that stage.
Very quickly and in parallel, we moved our operations to phase II, and we started to consider what we called winning the peace would look like. What do I mean by that? To us, that meant what should we be doing during this period of lockdown and operational constraints to ensure that we are, one, ready for whatever comes next, but two, we emerge stronger. For us, it meant using our time and resources really wisely to drive improvements in the business. In many cases, these were improvements that we had planned already, but we massively accelerated them. We generally aimed towards improving our customer service, improving our customer propositions, either to suit the immediate and constrained trading conditions, such as improving dramatically the digital transacting capability within our merchant businesses. Actually looking towards building a stronger platform for future growth.
The key recognition here is that COVID has not only been a crisis for us, it's been an opportunity to really focus our time and resources and to achieve much more than we had planned to in a shortened timeframe. To do this, we adopted a whole new operating rhythm and drumbeat, being comfortable with making lots of suboptimal, untidy decisions, experimenting, learning fast, measuring, and moving forward fast. It was a fundamentally different way of working for us, and we've learned a lot. What has this meant for our group key priorities? I've described a huge amount of change, none of which was planned at the beginning of this year, or actually even when we last spoke to you at the beginning of March. In March, I presented four key priorities for the group. Many of you will recognize this slide.
The first one, as part of simplifying the group, was obviously to successfully de-merge Wickes, which was an action that we paused at the beginning of lockdown and pre-lockdown. The board continues to believe that the de-merger of Wickes will allow both businesses to fulfill their potential and will only pursue it when the market conditions are appropriate to do so. The other three priorities I think we can broadly group together under the banner of really strengthening the core of the business. The regeneration of Travis Perkins General Merchant, as I said in March, was well underway. We've driven this at much faster pace of change, and we're ahead of where we plan to be. For Toolstation, it's proven its strength, as Alan has mentioned, both in the U.K. and Europe with strong like-for-like growth during the most difficult circumstances.
The network expansion, as Alan mentioned, was paused, but we've made so many other really important operational changes and progress that I'll set out, which really gives us a strong platform for the future. We've made some excellent early progress in our broader operational platform for the business, and a huge amount of planning is underway from the lessons we've learned during the pandemic to continue that progress. First then to our TP General Merchant and really accelerating the strategy. Our aim, of course, is to be the first choice general merchant in the U.K. and to sustainably outperform the market. That intent is as true today as it was six months ago. This slide will, of course, look familiar. We were working on how we improve our range, our service, our supply, and our estate.
The difference, of course, between then and now is where we are in that plan and what we've achieved. COVID has fundamentally changed the way in which our customers wish to deal with us. They had change forced upon them, and we've enabled it very, very quickly. I won't talk through all the examples on this slide. We've speeded up our range and category reviews and enabled them to have much more local flavor very, very quickly. As I've mentioned, and as Alan mentioned, we pivoted our operations to call and collect and click and collect immediately, which has allowed us to give and allowed our customers to be much more organized and disciplined with planned collection and delivery slots, organized over web and phone. We've obviously made huge changes to our network and announced some deep cuts within our merchanting businesses and within our TP General Merchant.
We've closed 82 out of 650 branches. That's 13% within our General Merchant. As I touched on in March, we actually had a strategy over the few years ahead to close some of our smaller suboptimal branches, particularly in and around large conurbations. The reality was that many of these small branches couldn't operate in a COVID compliant way, and indeed, within the new ways of working that we had to bring in instantly post-lockdown. Under those new ways of working which sustain and given the uncertainty that we see in the macro market that Alan touched on, they were unlikely to be viable in the long term, and therefore, we accelerated closure of those branches. We've really made tremendous progress to enhancing the merchant's digital capabilities. Merchanting has long lagged retail businesses in the use of digital platforms for transactions.
As we all know, for merchant businesses, transacting through a digital means is only a fraction of the capability that our core trade customers look for. As it happens, COVID accelerated and changed that game materially. Much so that we had to provide a contactless route to accessing materials and to transact in order to do so, and that became a significant priority from March onwards. The business responded. We developed new and upgraded digital platforms for our merchant businesses very quickly, delivering click and collect propositions, greater visibility of stock and availability by branch, which has been hugely successful and allowed us to organize better delivery. It's been a real step change for our merchant businesses. While some customers, of course, will return, and are returning to branch-based transactions and interactions, we see this as a sustained shift on an ongoing basis.
What we've done has put us a long way ahead of where we plan to be. There's still more work to do, of course, and we are making great progress. The other leg of that work, which actually is more important to our trade customers, is account management online and through an app. Whilst we focused on the transaction piece through lockdown, that is now returning to be our number one priority based on customer feedback, which makes transacting with us much more easy for our customers. Great progress made in the digital space. Our specialist businesses are extending their advantage propositions as well. They're very much core to our business, and we've made significant strides forward here, too. They have, too, worked very hard on accelerating their digital platforms.
Keyline have partnered with TP to provide a much broader, hire offering, and we've rapidly developed new pricing frameworks for customers, making quoting far more easy, quick, and consistent. BSS have continued to develop their customer propositions as well as their digital capability, restructuring their tendering processes and making great progress in developing BIM capabilities for the future. Benchmarx have entered a much closer strategic partnership with TP to really integrate their back office systems and bring customer sets together to maximize the opportunity for these businesses. That sounds simplistic, but of course, in our customer base between these two businesses, there's huge overlap, and now we will work towards getting a much more coherent one view of customer and drive shared, maximize share of wallet for these two businesses. For P&H, as Alan outlined, we've made great progress in continuing to provide essential services for our installer customer base.
We continue to improve the business. They have made, again, great progress in upgrading their web platform and developing their click and collect capability. The strength of our pure-play online businesses like PlumbNation has really shone through the pandemic. We're seeing good recovery in RMI post-lockdown. Of course, we're entering the heating season now. The disposal of F&P obviously simplifies the business. Whilst we continue to retain the intent in the longer term to sell the business, we are focusing on operational improvement and improving returns. For Toolstation UK, we've made very significant developments in the business. In recent years, the key focus for Toolstation, as Alan outlined, has on network expansion.
Whilst the rollout was paused, of course, we opened 19 branches during July and August, and as Alan said, we're on track for 60 new openings this year, which in and of itself is tremendous progress. That really wasn't the only area for development for the business, and we've achieved some really exciting things over the last few months. Toolstation entered the crisis, of course, with really strong digital capabilities, which enabled a seamless transition from branch based to wholly digitally based transacting and trading. That kind of trading volume and the increase in trading volume that we saw in those early days really caused the infrastructure to creak.
I will never forget sitting with James Mackenzie and the senior leadership team of Toolstation very early on Good Friday morning, seeing live the web transactions increase hugely, and to an extent that the website started to slow as it reached maximum capacity. What did the team do? Well, they simply rebuilt the website, and they did it in one weekend, and they did it over the Easter weekend. I mean, tremendous performance to execute that sort of change and then deliver a capacity that allowed the business to continue to grow, and at pace. Obviously, that's a change now that will last in the longer term. The team followed this up with replatforming the wider business, which gives vastly improved operating capacity and effectively future-proofs the IT platform for the years ahead. This was done in a matter of weeks.
It gives the business a much more stronger platform for growth in the future. The volume of web transactions obviously wasn't the only challenge. Higher web sales comes the challenge of higher home deliveries, and the home delivery distribution center really maxed out in capacity quite early on. Another challenge was overcome in very short order. In days, we repurposed the Redditch distribution center from branch replenishment to also be a direct-to-customer replenishment center. That was done, as I say, in days. With all this change going on, and whilst operating drive-through gazebo covered Click and Collect services for our customers, Toolstation delivered very strong like-for-like growth. I think you'll agree that is truly a remarkable performance. Toolstation Europe continues to gain traction.
Our European business was well-placed, as Alan mentioned, with a combination of their multi-channel capability, their value offer, excellent product availability, a really winning formula in their markets, and DIY customers and trade customers sought them out during lockdown. There's been a significant increase in new customers, and these customers are proving very, very sticky. Once they try Toolstation, the rate of repeat custom is very high indeed, and you can see that in the growth figures. Even during the lockdown period, volumes have grown considerably, and it gives us really great confidence around our plans for continued expansion through 2020 and beyond. For Wickes, I think the story is one of demonstration of the benefits of digital integration.
Of course, David stood before many of you in January at the Wickes Capital Markets Day, setting out why he and the team believe so strongly that their strategy of a fully digitally integrated home improvement business model was so strong. Seven months on, I think all they've done is demonstrated the benefits of that model very, very clearly indeed. At the point of lockdown, the business instantly transitioned to 100% digital transacting with the store network focused on it becoming fulfillment centers for customers for drive-through Click and Collect, and it made a seamless transition for customers. Again, similar to Toolstation, some of the stats for that period are truly mind-blowing. Over 60,000 orders for Click and Collect or home delivery processed daily, six months of normal Click and Collect volume every six days, and more than 1 million new online customers registered with the business.
That is more than the previous 11 years combined. A phenomenal performance. Of course, as Alan mentioned, that was on the core DIY side of the business. The Do It For Me K&B showroom and installation service obviously had to be paused during lockdown as we couldn't enter people's homes. As lockdown lifted, it was clear that there was pent-up demand for those services and those products. As we reopened the branches, the team developed ways of working both within people's homes, but also placing a new digital visualization and surveying tool into the market, which has allowed our DFIM business, in a safe and controlled manner, to reopen and meet the demand. Now it's back up to speed with very encouraging lead generation over the last few weeks. We've learned some very important lessons from this period.
It's hopefully clear to you all that we've achieved a huge amount, both to enable our operations to navigate the crisis, but actually to drive some significant improvements in our business. We really just have not wasted this crisis and hunkered down to try and survive it. An important question that we regularly ask ourselves is what those important lessons that we've learned are, and what would we do differently next time? Importantly, what have we done in this period that will embed in our ways of working going forward? My first thought, which I mentioned earlier, is around the culture and the values of this business. I mentioned that at the very start, but the strength of the culture and values in this business is what attracted me here over a year ago and really has served to guide us through these challenging times.
We've prioritized safety and wellbeing at all times, and we've taken time to consider the moves that we've made and the pivots that we've made within the business, remaining committed to our customers and committed to fulfilling the essential services that we provide them. We've been values-led through all of this, from everything to safety, to operations, to how we conducted ourselves with furlough, and this has retained great commitment from both our colleagues and our customers. Another thing that strikes me is obviously timescales. I regularly have to remind myself of what we've achieved in such a short period of time. Whilst I've referenced the last six months, many of the changes that we've put in, practically all of them, have been done in days and weeks. That demonstrates to me that when we focus and when we move at pace, we can achieve a huge amount.
Acting was the key, acting in the knowledge that actually our first attempt at a new operating model wouldn't be perfect. We made lots of suboptimal decisions, but we learned from them, we shared them, and we moved very fast to make improvements, and that has been tremendous. Nothing or many of the changes previously seemed too big or too complex, and we broke them down. We started small, we piloted hard, we've learned, and we've moved fast with lots of decision-making at pace. I think we've learned a lot about ourselves during this period. I think we're a lot more technologically capable than we thought we were.
Whilst we've made very early progress in that regard, we're really starting to understand how we utilize our capability, work with our customers, and use the data that's available to us to provide a better service and a better business going forward. I also think we've realized as a business how much we can learn from each other. The crisis has created similar challenges for all of our businesses. By sharing that knowledge, by sharing ideas, by sharing the results of pilots quickly and seamlessly across the business, we've become much more agile and much more successful as a business. This collaboration between businesses is something that I'm really passionate about and we'll be doing more of in the future.
We've already seen the benefits of this, and more importantly to me, our colleagues have seen the benefits of this, and we move forward with that high on our agenda. What about the future then? We've begun to think about the future before COVID arrived on our shores, but it became very quickly apparent that our planning for the future couldn't stop as a result of the crisis, and we needed to push forward with our thinking. Indeed, some of our hypothesis that we were testing and talking about back in the autumn around customer behaviors and how they might change and how business models might change in the future, have been accelerated overnight. Therefore, we need to keep thinking about them, planning for them, and delivering solutions to them. I think about the future across three horizons with clear strategic aims for each of those horizons.
The first one, I think we discussed at length today. We call it strengthening the core of our business, getting the fundamentals right to deliver a successful best-in-market service to our customers today, and to drive sustainable market outperformance. This includes three of our key priorities, and as you've seen today, we've made some really fantastic progress. We're actually, I think, ahead of where we intended to be, but there's still a huge amount of work still to do. The medium-term horizon, we call this a staging post to create a modern merchant. What does that mean? It really means a leading business materials distributor, one that is truly customer-intimate, but digitally enabled and completely integrated with its branch network.
It means greater collaboration across our business, being more intimate with our customers, having a single view of that customer and how we can maximize our share of their wallet, and really maximizing the opportunity at group level. It means leveraging our scale to develop leading customer propositions for the longer term. Finally, of course, we need to look longer term. The construction industry landscape is changing. COVID has shown us that. As a supplier to the industry, we need to be prepared to change with it, of course. We ask ourselves some broader questions. How do we partner with the breadth of our customer base to enable our customers to do more, more easily? How indeed, do we help them grow their business, and in doing so, grow ours? Lots more thought to come over the months ahead.
To sum up then, I think to try and describe the first half of 2020 is actually quite difficult, but in short, I'd say that we have successfully navigated the COVID crisis so far. It's still with us and changes every day. We've achieved a huge amount in improving our business, meaning that I think we're coming out stronger. We've done this by really focusing on a timely and clear purpose for our business, being true to our values, leading the industry, and using our voice with government very, very clearly, looking after our people, our colleagues, and our customers. We're coming out stronger because we didn't just hunker down and waste the crisis. We innovated fast. We challenged ourselves. We knocked aside old barriers. We got out in front. We took tough decisions early. We focused on winning the peace.
We've still got an awful lot to do, but I feel very much as though, as a business, we're on the front foot. With that, Alan and I would be very happy to take your questions.
Our first question comes from Yves Bromehead of Exane BNP Paribas. Yves, the line is yours.
Good morning, gentlemen. Thank you for your presentation. A few questions on my side. Number one, I wanted to come back to the annualized cost-saving measures. I just wanted to know if you could clarify the timing of this between H2 2020, but also what we should expect in 2021. I would also be interested to better understand the mechanics behind this, given that you benefited from the furlough but also the business rate relief, and therefore, what is exactly the net impact, probably into 2021. Number two, looking more near term into H2 2020, I was just wondering if you could give us a bit more color in terms of the margin side of the business, especially on your comments with the better activity levels, the cost-saving measures that you've implemented, and the business rate relief, which should continue into H2 2020.
Any color on that would be helpful. Maybe just a last question on the digitalization of your merchanting business. Given that you have seen a pickup in activity, can you comment on whether or not you've been seeing a switch back to the more traditional way, and what type of investment you will do in the IT side of the business in the future? Thank you very much.
Thank you, Yves. Perhaps for those first two, I'll hand to Alan, and then I'll come back on the digital merchant.
Yep. Yves, thanks for the questions. On the savings from the restructuring program, GBP 120 million of gross benefit. I think I referred to the fact that the program was essentially complete by the end of August. If you take that GBP 120 million and you take four twelfths, that takes you to the number we'd anticipate for H2 2020. Therefore, as you go through into 2021, I think you can basically assume on a gross basis, GBP 10 million a month for the first eight months before we start to cycle the saving from September onwards in 2020. In terms of the furlough scheme, no anticipated benefit in the second half of 2020. I think that's done. From a business rates point of view, around GBP 40 million in the second half and then GBP 20 million to come in the first quarter of 2021.
I think we need to think when we're thinking about the shape of the P&L, about why we did the restructuring program. We undertook the restructuring because we're acutely conscious of the volume environment in the short to medium term. The design of the program was to offset some of the shortfall in gross profits that we'll see because of reduced volumes going through the business. As we think about the second question you had, Yves, on H2 2020 margins overall, I think I referred separately to the gross margin element that I'd expect to see that again, broadly unchanged overall. I think we tend to see a slightly stronger second half in terms of margin. There will be benefit from the fact that volumes have picked up. It's important to remember how uncertain the current environment is.
I think we've deliberately not given detailed financial guidance today because we just think the environment remains pretty uncertain at this stage.
Good. Thanks, Alan. Just on the digital merchant question, Yves, of course, we saw pickup through necessity. We closed our gates, but we served our customers through contactless means, and of course, our customers pivoted to using technology as a means of accessing materials. Of course, as I mentioned, we have seen a transition back to, as we've opened the gates of our branches while remaining and retaining our safe working practices in a very controlled way, we've seen customers wanting to re-transact through the branch. We continue to develop our digital capability because we see a shift in our customers' behavior and a willingness to use technology to work with us. It makes it simpler and easier for them in a number of different ways. We continue to develop that.
An awful lot of that development has been obviously our people's time and capability in developing these tools and deploying them very, very quickly. We're still, as I said, working on how we plan the future of our digitalization of the business as part of our broader improvement in our technology underpin for the business. As we plan that, obviously, we'll be thinking about the investment in that as we move forward. Broadly at the moment, that is within our OpEx line as we invest our time and work with our customers to develop that capability. I hope that answers your question, Yves.
Yes. Thank you very much.
As a reminder, ladies and gentlemen, that's star followed by one on your telephone keypad to register a question. We now have a question from Robert Eason of Goodbody. Robert, please go ahead.
Good morning, everyone. Can you hear me?
Yeah, we can. Morning, Robert.
Morning. Sorry, I've got five questions. I don't know if you want them all at once or one by one.
Why don't we take them all at once and then we'll decide how we answer them?
Yeah. Okay. My first question's on rebates. You call it out as being an impact in H1, which is totally understandable. I just want to understand what your assumptions are in terms of coming up with the rebate in H1? Are you making assumptions about H2 in terms of where volumes would end up to be able to come up with that figure? A debate about how much of it you've already booked in rebates and the assumptions that that is based on. Second question is around bad debts. Quite clearly there's increased provisions being put through in H1, which is totally understandable. Generally, what are you seeing on the ground as you chase around your customers to pay? Is there any particular areas where it's harder? Smaller customers versus bigger customers, different sectors. A general discussion around that.
You talk about July and August is back to previous years' levels. Obviously, when you broke out the monthly figures for April and May and June, there was big variance between the businesses, mainly retail being a big plus positive outlier on that. Can you just give us a bit more detail of the mix within that July, August back to 2019 levels? My last question, sorry, there's four. My last question is just on the store closures. When you're analyzing this, and I understand it's only a couple of months so far, how much of the sales are you capturing, and how should we think about that as we model going forward? Thank you.
Alan, should I take the last one and you pick up the rebates and debt?
Yeah, Robert, quite a financially focused set of questions more than the strategic focus. On rebates assumptions H1 and H2, the element that I was referring to on rebates that we've looked at differently, of course, is any annual volume rebates or growth incentives that we receive from our suppliers. We've made a fairly prudent assumption at this stage, given the lower expected level of purchases for the year. We've reflected that as we accrue for the expected benefit for the first half. We've thought about where some of the second half volumes, in terms of purchases, would lie and then form the view on that. From a bad debt
perspective, the increased provisions are largely what you're required to do through the accounting standard IFRS 9. You have to look forward to your expected credit loss. How do we do that? Well, we base it on previous recessions and what we've seen. At this stage on the ground, I refer to the job the credit teams have done with sales and with branch colleagues. They've done an absolutely outstanding job and have worked tirelessly with our customers to collect. There are, of course, a few customers who have gone under during the second quarter, but we've not seen a large step up at this stage in business failures amongst our customer base. That's the point of provisioning for the future in case that were to arise.
In terms of July and August, details on mix, I'd say it's largely a continuation of the trends that we were seeing in June. We're seeing continued robustness in DIY in retail across Wickes and Tile Giant. The kitchen and bathroom business in retail is recovering well. Toolstation remains a consistent strong performer. We've seen the merchants, I think you have to break it down a little by end market to really understand what's going on there. More softness in new starts and in commercial, the RMI piece remaining pretty robust at this stage.
Fabulous. Just on your last question, Robert, around store closures and the retention of customers and custom. Clearly, there's a mixed picture here. Within our general merchants, I think, as I said, we focused on the smaller, typically rural or small market town branches that proved to be suboptimal for us going forward. Of course, with the smaller, typically local customer base there, we've seen some loss of that customer, whilst not all. Within the urban areas, we've seen and would expect, again, it's typically a larger customer base retention of more than 80% of those customers. Within our specialist merchants, the picture's slightly different, of course, where we see very high retention within CCF, within Keyline, within BSS. They're larger relationships, larger customers we typically deliver, and so actually they're less reliant on coming into their local branch, and so we see very high retention rates there.
A mixed picture depending on which part of the business and which part of our customer set we're looking at. I hope that answers your questions, Robert.
Yeah. If I could, just one more. Sorry. Just on Benchmarx and strategically aligning it more with Travis Perkins. Is this too much of a big assumption to assume we could see that in a five-year period being fully integrated within the general merchant and branch network, given the crossover in customer base? Is that just a step too far?
Well, as I said, we're looking at full integration in terms of many of our back office systems and processes because the businesses share a customer base that is very common. We aim, as I said, to maximize the opportunity and the proposition, the integrated proposition that we give to those customers and, of course, the share of their wallet. What we find as we move those businesses together will determine the decisions we make going forward. It will be a close integration of the businesses, and that process has already started.
Okay. Thank you.
Our next question comes from Will Jones of Redburn. Will, the line is yours.
Thanks. Good morning. Yes, a few from me as well, please. I think mainly revolving around gross margin and mix. Would it be possible, I think the operating margin decline in general merchanting was about 500 basis points. I know you don't like to split out exact details on gross margin anymore. Could you give us a broad feel as to how much of that came at the core line, potentially? Within the gross margin pressure, you helpfully highlighted various moving parts. None of them were actually around industry competition per se, although one of your competitors did refer to that as an issue back earlier in the year. Could you just give us a bit of a feel on that point around the industry competitive backdrop, please? There's just a couple of questions on mix, I suppose.
I was quite intrigued by your points on collect versus deliver. If we look in 2019, I think 34% of merchant sales were collected, and it was 42% in H1 2020. It's actually gone up, which surprises me given the pandemic. Can you clarify the point, please, around collect versus delivered within the mix? Then actually, sorry, the last one was really just jumping topic slightly, but Plumbing & Heating, obviously there's been a lot of change in that business in the last few years around branch closures and disposals and now cost savings, and it won't make much money, if any, in 2020. Could you give us a broad feel for what you might see as the right margin at a sensible level of volume at some point in the future for that business? Obviously a lot has changed.
Thanks.
Thanks, Will. If I start with the point on merchanting operating margins, you're right. Overall, the gross margin drop is a relatively modest part of the movement. I don't think it's helpful to focus on a 500 basis point decline in margin, given the severe impact of the lockdown on volumes. Just thinking about the competitive backdrop, I'm not sure we've seen a huge amount of change, to be honest, during the period. I think all competitors have rightly been focused on health and safety, and on supporting their customers through unprecedented conditions within the marketplace. I'd say we've not seen intensity on pricing during that period. It wouldn't surprise me if there is some pickup on the competitive landscape from a pricing point of view, given the volume shortfalls people have seen over the year.
When I look at our overall trends, I'd say we're pretty comfortable with where we've been going there in terms of our relative share. As both Nick and I said, we think we're well-placed to continue to outperform in the medium term. From a plumbing and heating point of view, yeah, a huge amount of change. If we think about the different drivers, we started from a point where the business on last year's volume was making around a 3% operating margin. There is some benefit from the disposal of PF&P, given it was a wholesale business, and therefore lower margin, albeit around GBP 250 million-GBP 275 million of revenue. Think of that as an upwards point. We've carefully said in the statement there's lots more that we can do to continue to improve the business over time.
For competitive reasons, I'm not going to go into the detail of what those initiatives are, but we are optimistic that we've got some good plans. When we look through the impact of the pandemic, we're positive that we can continue to improve that business a little further from this stage. I'll have to get back to you on the detail on the collected versus delivered. I think intuitively, you're quite correct. I would expect that to be more delivered overall within the period, but we'll come back to you on that.
No worries. Thank you.
Thank you, Will.
We now have a question from Christian Hjorth of Numis. Christian, the line is yours.
Thank you, good morning, everyone. Just three questions from me, if that's okay. First one is on stock availability. We've heard that certain products have been less available over recent times, but I know obviously you've had quite a significant inventory inflow in terms of working capital over the period. Just any thoughts on being able to restock and keep products and stock availability in general. The second one is just on Toolstation. Firstly, there was some extra COVID-19 overheads you referred to. I was just wondering if that's expected to continue in the second half, or whether productivity in that regard can improve as time goes on.
Also with regards to Toolstation Europe, whether you can give any guidance at this stage to perhaps how the losses in that business trend, you've obviously given it for this year, but perhaps looking into next year as well. Finally, just coming back to the restructuring point, GBP 120 million of cost savings, which you've run through. Just if we look back to a normalized basis in, say, 2019, would that be a net mutual impact on EBIT? I'm just trying to understand what the potential impact on revenue and gross margin would be on a normalized basis from that restructuring. Thank you.
Thank you, Christian. Should I start?
Yeah.
On stock availability, yes, I think it's well known anecdotally in the market that very quickly some materials, particularly plasterboard and plaster, for example, and some parts of the timber category, quickly became pretty scarce. I think some of that was related, for example, to the very rapid deployment of materials to construct partitions for Nightingale Hospitals, for example, as well as the completion of work that was ongoing. That stock, whilst some items have remained in short supply through recent months, actually an awful lot of that availability has improved and we're seeing a return to more normal levels. Overall, the stock levels are, as I say, improving and availability is improving. On Toolstation, the extra overheads, as we both mentioned, quickly pivoting as successfully as Toolstation did to operating a car park base, gazebo covered click and collect model.
Obviously we had to invest in colleagues' time to manage that model safely for our customers and for our colleagues. As we've moved through that, we're experimenting with different technology to help us manage customer movements within and around our stores. Obviously now in recent weeks, as we returned within Toolstation to our stores being open fully, those costs obviously will normalize to pre-COVID levels. That was a short-term issue. There were some increased costs associated with home delivery, but again, as we return that business to more normalized levels, we're looking at ways to take those costs back in.
Let me do the last two, Nick. Christian, on Toolstation Europe and the loss trend, I think the level of loss will depend, to some extent, on the scale of our ambition and how quickly we go after the business. Clearly, as indeed in Toolstation UK, when you open new branches, you incur the overheads before the sales come through, and it tends to be about 18 months till they get to contribution positive to the central overhead. In other words, if we see an opportunity to go much more quickly and to accelerate the branch opening program in a European market, that will actually increase a loss in the short term. On the other hand, we've got a Dutch business which is maturing rapidly. We've made fantastic progress in the Netherlands.
I think we have a real winning business there, and I would expect to see that business, over the next 18 months, move towards being more EBITDA neutral rather than loss-making. That will offset some of the numbers in other markets. On the restructuring and how to think about that, it's actually a pretty difficult question at this stage. That GBP 120 million is a gross figure. Will we get to net neutral? Well, I think it depends on how you model out what happens on revenue. If I start from a total revenue for the group, somewhere between six and seven billion GBP, take a percentage point on that. You can see that on an annual basis, a 1% volume shortfall at a 30% gross profit if you did nothing, could be up to a GBP 20 million impact to profit.
There are some overheads which are more variable with volume, so you'd expect those to come down. It's not fully a GBP 20 million impact for 1% on a full year basis. Depending on where you see the volume panning out, you can see the importance of having taken out some of the capacity within the business overall. Just one point to add on Nick's around stock availability and restocking. Given the ongoing Brexit uncertainty, do expect to see us investing a little in rebuilding some of that inventory in the next four months, given that we were carrying around a GBP 80 million level of inventory at the end of 2019 in case of no deal. We will be looking to rebuild some of that given the ongoing uncertainty.
Excellent. Thank you very much, guys.
Thanks, Christian.
We now have a question from Gregor Kuglitsch of UBS. Gregor, please go ahead.
Hi. Good morning. I hope you can hear me well.
You can, Gregor.
Good. Thank you. I just want to come back, I guess, to maybe slide 11, which kind of breaks out the earnings movement. Obviously lots of pluses and minuses. You've given us some help, on overhead savings, I think you were suggesting GBP 40 million, GBP 20 million on the reversal of provision. Indeed business rates being, I think, another GBP 40 million. There's quite a lot of positives there, right, if you tally those up. The question, I guess, is, obviously there's the volume equation, but then there's lots of stuff like GBP 20 million overhead cost inflation, Toolstation and that. Can you just give us some picture on some of these other moving items, like the GBP 20 million, for instance, on the overhead cost and tools, so just we can get a little bit of a sense, I guess, for the second half.
Maybe just to be crystal clear, I mean, the reason that you've not chosen to give any kind of second half earnings guidance, I mean, we're hearing, obviously Q3 is almost over. Does that suggest you're perhaps not quite clear at this stage whether it'll be basically flat compared to last year? Just to be clear. Then a couple of questions, maybe just a little bit technical, but on the like-for-like sales, so you're saying you're close to flat on a like-for-like basis, but then obviously you shut branches, which I believe, if memory serves me right, cost 4% or 5% of sales. Is that the way to read it? You're slightly down like for like, and then we have to knock off the store closures. Then maybe on cash, so obviously you had a great performance in H1.
I think you're saying the GBP 100 million of that comes next year. Do you expect debt to rise from here? Obviously absent of that repayment, so that next year. This year, do you think it'll rise, or do you think overall the increased working cap investment will be offset by basically earnings and you did flag lower CapEx as well, just to understand the debt trajectory, that would be helpful. Thank you.
Okay, Gregor. Let me begin. Actually, I may end as well because they were all quite financial. Overheads and how we should think about that. I think you could take the inflation that we saw in the first half and assume that that's an annual event, so you could continue that through into the second half. On Toolstation from an investment point of view, clearly there was a slowing in branch openings, but we're now re-accelerating the branch openings to complete the 60 for the year. There'll be some ongoing investment there on a gross basis within the overhead movement, and we've given very explicit guidance on Toolstation Europe at this stage. I think you did identify all of those savings elements on the other side quite clear. You asked a question about second half guidance and said Q3 is almost over.
I'd say Q3 from what we've recorded is two-thirds of the way through, actually. Moreover, July and August from a trade point of view are slightly weaker months than September as people take their summer holidays, and the trade come back in. I think we need to see how that pans out through September and October to have a clear view on where things head. The reason we're not giving guidance today on the balance of the year beyond what we've said in the statement, is because the external environment is so uncertain at the moment. You might find other people being a bit more bullish on things or a bit less bullish.
At this stage, I think we need to wait and see how things play out, what the impact of local lockdowns may be, or if we get towards a second set of national measures, not suggesting a national lockdown, but those measures may be tightened at some stage given the increasing incidents of cases per 100,000 that we've seen over the last couple of days. On your point on like for likes, I think we've been clear today and previously that a number of those branches that we've closed are much smaller than the average. There's not as pronounced a gap between like for like and branch closures. Take the like for like at this stage is essentially flat when you're thinking that through. From a cash perspective, do I expect debt to rise in the, let's play that out to the 31st of December 2020, ±GBP 50 million, I think we're going to stay about where we were at the end of June. We reported this morning that liquidity had increased by GBP 100 million over two months in July and August. As we start to see the trade come back and the debtor book rebuild, I would expect to see some investment there in the debtor book. I'd expect to see creditors and stock broadly offsetting each other from here. I'd expect to see the growth in EBITDA versus H1 in H2 offsetting the cash impact on the debtor side. That's how I get to roughly staying around the level that we reported at 30th of June.
Great to hear. Thank you.
Thank you, Gregor.
Okay, we've got a question from the webcast from Sid Sukumar from J O Hambro. It's a two-parter. There's a history of IT upgrades going wrong at Travis Perkins. Could you please talk about some of the actions the company has taken to avoid any missteps this time around? The second part, could you also please provide some color on some of the actions taken to improve the operational performance of the P&H segment?
Good. Okay. Well, I'll start. Thank you, Sid. We are taking a fundamentally different approach to addressing how we work through and with technology. As I think both Alan and I outlined, we've rapidly developed and deployed tools from our web offer to digital transacting and account management capability that we've developed both in-house and with partners. We've done so in a thoughtful, incremental way using capability, as I say, that we have in-house and with partners, and done so as small, agile teams working between our technology function and our business together and very close to customers. That's a fundamentally different way of developing capability in an agile way, learning and measuring success and moving very quickly than typically the large scale planned ERP type programmatic approach that many companies, not just Travis Perkins, have taken in the past.
We know that there are substantial risks in working that way. That being said, we are obviously planning very carefully the way in which we will upgrade and replace some of our legacy transactional systems. Again, we're taking a fundamentally different approach. We're learning the lessons from the past. We're working in a very agile way with both business and technology teams working together. I think our approach this time is fundamentally different. What we've been able to learn through the crisis has been substantial and is informing our approach. Currently we're making good progress. Nick, let me answer Sid's question there on operational performance improvements in plumbing and heating. I did get a question earlier on this and said for competitive reasons I don't want to give too much detail, but I'll try and help on some of the elements.
Firstly, on the cost saving program, we've closed some more branches in plumbing and heating given the impact that we anticipate from the recession. Those cost savings, GBP 25 million annualized. We've also started looking at some further supply chain efficiencies that we can get by consolidating volumes within the Omega warehouse. That's our large center in Warrington. We're getting benefits from the simplicity of the business, having removed some of the, I call it a bit of a distraction from having a wholesale business within there.
I think if Andrew Harrison and Dave Evans, who run plumbing and heating, were with us this morning, the single thing they would identify is since we created the separate standalone functions to support a potential disposal of plumbing and heating, they've had a much greater accountability for the cost base and much greater visibility than if you've got a load of shared central functions. That's given them line of sight to be able to put in place some further changes within the business, which were part of the cost saving program. There are some gross profit initiatives, but I don't want to go into the detail of those. We are looking at supply base partnerships and how we can make those more effective in the future. I'm not going to go into detail for competitive reasons.
Thank you. Hopefully that answers your question, Sid. I think we have time for one more. On the phone?
Our next question comes from Ami Galla of Citi. Ami, please go ahead.
Yeah, thanks. Just two questions from me, really. On Toolstation. I remember last year you talked quite a bit about the product range extensions that you'd implemented in that brand. I'm wondering if you could give us some color of where we stand on the journey and what's the plan forward in terms of the product ranges in the business. The second question I had was on Wickes and Toolstation. Could you update us of where we stand in terms of e-commerce penetration in both these channels? Maybe both online and click and collect, how has that progressed after all of your branches are now operating in full service?
James, I'll start Ami, just on range extension. The Toolstation team are continuing that journey, with an extended and deeper range, both with own brand products, which are proving very popular with our trade customers, but also continuing to enhance the range of a great professional range of tools and products for our core professional tradespeople customer segment as well. Continued journey, Ami, we will continue to look at what our customers want and how we serve them best. We'll continue to expand our range. That's an ongoing piece of work for the team. Good progress made so far and that journey continues. Comments on the mix, Alan?
Yeah, just to add on Toolstation, if I can first, Nick. The new catalog launch is in the next week or so in Toolstation UK. If you were to compare that catalog with the previous one and the size of it with the catalog over the last three years, you will see that getting thicker and thicker each time. That gives you an indication that the SKU base is still increasing. From a Toolstation Europe point of view, we are a smaller range at this stage. The pattern will be to follow the U.K. in each of those markets as appropriate to the local demand.
On the question around the e-commerce penetration in Wickes and Toolstation, I think, Ami, the sense of the question you're asking is with the branch network now fully up and running again, or almost fully up and running, and I'll explain that from a Toolstation perspective, what are the levels of home delivery and click and collect that we're seeing? From a Wickes point of view, we still have a much higher level of home delivery and also click and collect. Remember, we've got the online in-store capability as well. They're still running significantly ahead of prior year levels. From a Toolstation perspective, my comment is that not all of our Toolstation branches at this stage have gone back to things like taking cash and also having customers in the branch, for operational reasons where they're quite small and it is difficult to implement distancing.
Those sorts of branches would still be 100% e-commerce, if you like, on the definition. Again, take that to one side. Significantly higher level of home delivery continues within Toolstation as well.
Great. Thanks, Alan. I think we have time. We have two further questions.
Our next question comes from Charlie Campbell of Liberum Capital. Charlie, please go ahead.
Good morning, everyone, and thanks for taking my call. Just a couple of fairly short ones from me, I think. Just a question of the overheads and trying to work through that overhead bridge on slide 11. I don't know if you could tell us kind of what the overhead saving was from the F&P disposal, just to help us square that circle. Secondly, on material pricing, obviously a couple of things in short supply, but would we right in thinking that material prices are generally fairly neutral? Are there some pockets of inflation at all? I was particularly thinking about currency maybe.
Yeah. Charlie, on the F&P saving, it's basically the broadly equal and opposite to the impact from Toolstation Europe, overheads within the mix overall. At this stage, we're not seeing significant cost of goods inflation coming through. We're about to enter that round of calendar year annual negotiations, so let's see where that plays out. I'm not anticipating significant changes at this stage.
Thank you, Charlie.
You're welcome.
Our next question comes from Sam Cullen of Peel Hunt. Sam, please go ahead.
Hi. Morning, everyone. Just got a couple. With respect to the kind of guidance or lack of guidance for this year, can you remind us how big September and October are in profit terms in a normal year? We can take that into the equation. Also just, you gave some kind of helpful color earlier on in the presentation about the trading in kitchens and bathrooms. Wondering if you can just give us any comments in recent weeks there, and also some color around how important that is to profitability of Wickes relative to the core business.
Yeah. Hi, Sam. It's Alan. Just on the K&B point first, in terms of profitability at the moment, the strength we're seeing in core DIY is more than offsetting any impact from shortfall on kitchen and bathroom showroom sales. Remember that on the showroom sales, we book the revenue when we ship the goods. Typically, and we talked about this previously, there's an eight-week lag between receiving a confirmed order and actually shipping, or six to eight weeks. What we saw coming out of lockdown was we had shipments when tradesmen could get back into the home during June, which came before new orders picking up. We've seen a strong recovery in the order pattern. We'd expect to see those sales go through over the next couple of months.
From a profit generation, September and October together are a little more than 20% of the full year profit for the group. What you tend to see in the group overall is December, January, and February being relatively light overall, with the exception of plumbing and heating, depending on how cold the weather is. You see a strong period from March to June. Profitability drops a little from that June level, normally during July and August, then picks back up September, October, November.
Okay, thank you.
I think that's all the questions we have.
Super. Well, thank you for joining us this morning. We look forward to seeing you again next time.