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WICKES GROUP PLC (WIX)
26 July 2022
Wickes Group plc – Trading Update for the 26 weeks to 2 July
Strong first half sales, uncertainty in the macroeconomic outlook
Wickes Group plc ("Wickes"), the market-leading home improvement retailer, announces second quarter LFL sales growth of 5.4%, with progression in both Core revenue and delivered DIFM performance, resulting in first half like-for-like sales up 0.8% against strong prior year comparatives. Our local trade business continues to perform well benefitting from its market-leading value proposition; however, we have seen signs of softening in DIY and DIFM markets in recent weeks.
Notes: As a result of the 53rd week in 2021, H1 2022 LFL is based on the comparable 26 weeks to 3 July last year. DIFM represents delivered sales.
Core LFL sales for the second quarter were down -0.2%, reflecting an improving trend on the first quarter as one year comparatives started to ease. First half Core LFL sales were down -5.5% and remained significantly ahead on a three-year basis, with our outperformance reflected in the continued growth in Core market share(1).
Local Trade sales performed very strongly, with our TradePro customer base increasing by 60,000 to 690,000 during the first half (FY 2021: +80,000), and we continue to grow the awareness and appeal of the scheme through its compelling value proposition. DIY sales remain below last year and although activity is ahead of pre Covid levels, there have been signs of the market softening in recent weeks.
We continue to manage supply chain inflation responsibly by passing through cash cost increases while maintaining our leading price position.
DIFM LFL delivered sales in the first half were 29.7% ahead on a one year basis as we successfully worked through the elevated order book, despite ongoing Covid and supply chain challenges. We have seen some slowing of new orders in recent weeks, as customers are taking longer to commit to big ticket projects, however conversion remains good, cancellations remain low and we continue to have a strong order book.
Our strong balance sheet is reflected in an improved net cash position in the first half and, as previously indicated, we would expect to see some moderation in this cash position into our financial year end to reflect the normal working capital cycles in the business.
Whilst comparatives for Core sales ease in the second half, trading in recent weeks in DIY and a softer outlook for the DIFM market suggest customers are reacting to the uncertain macroeconomic backdrop as we enter the second half of our financial year. Given this backdrop we currently expect full year adjusted PBT to be in the range of £72-82m.
David Wood, CEO of Wickes, commented:
“Wickes has delivered another strong performance, as the business continues to provide the best value, choice and availability for customers. Our TradePro scheme is expanding with great momentum as tradespeople turn to Wickes for value during a period in which consumers are becoming more price conscious. It is encouraging to see continued outperformance in our Core market share despite recent signs of softening in the DIY market. We continue to do a great job engaging DIFM customers as they take a little more time to consider their purchases.
“Our investment for growth progressed in the period with five store refits completed in the first half which continue to drive strong returns. We remain watchful of the macroeconomic backdrop and are managing the business appropriately to navigate these external pressures. We are confident that our uniquely balanced business model and great value offer for customers will enable us to continue to deliver for the benefit of all our stakeholders.”
Wickes is a digitally-led, service-enabled home improvement retailer, delivering choice, convenience, value and best-in-class service to customers across the United Kingdom making it well placed to outperform its growing markets. In response to gradual structural shifts in its markets over recent years, Wickes has a balanced business focusing on three key customer journeys - Local Trade, DIY (together "Core") and Do-it-for-me ("DIFM").
Wickes operates from its network of 231 right-sized stores, which support nationwide fulfilment from convenient locations throughout the United Kingdom, and through its digital channels including its website, TradePro mobile app for trade members, and Wickes DIY app. These digital channels allow customers to research and order an extended range of Wickes products and services, arrange virtual and in-person design consultations, and organise convenient home delivery or click-and-collect.
3.1. Additional regulated information required to be disclosed under the laws of a Member State
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