REG - Wickes Group PLC - Trading Update for six months to 29 June 2024

WickesAnnouncement

31/07/2024 07:00

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RNS Number : 4795Y  Wickes Group PLC  31 July 2024

 

31 July 2024

 

 

Wickes Group plc - Trading Update for six months ending 29 June 2024

 

Sales & volume growth in Retail; market remains challenging in Design
& Installation

Profit outlook for the year remains unchanged

 

 

In the first half of 2024 Wickes has delivered continued sales and volume
growth in Retail(1) with LFL sales up 0.6%.  Challenging market conditions
have continued in Design & Installation(2) where we saw LFL sales decline
by 18.3%.  Overall Group LFL sales decreased by 3.9% compared to the prior
year.

 

 

                                            Retail(1)  Design & Installation(2)      Group
 H1                     Revenue             £633.2m    £166.7m                       £799.9m

 26 weeks to 29 June
                        Revenue growth      1.0%       (17.0%)                       (3.4%)
                        LFL revenue growth  0.6%       (18.3%)                       (3.9%)
 Q1                     Revenue             £282.9m    £80.8m                        £363.7m

 13 weeks to 30 March
                        Revenue growth      1.9%       (17.3%)                       (3.1%)
                        LFL revenue growth  1.7%       (17.6%)                       (3.3%)
 Q2                     Revenue             £350.3m    £85.9m                        £436.2m

 13 weeks to 29 June
                        Revenue growth      0.3%       (16.7%)                       (3.6%)
                        LFL revenue growth  (0.2%)     (18.9%)                       (4.4%)

 

 

Retail sales remain resilient and we have continued to increase market share
to record levels, demonstrating the continued strength of Wickes' great value
and service-led proposition.  Growth in the first half was driven by volume,
with selling price deflation of around 3%.  The phasing impact of the Easter
peak trading period this year reduced Retail LFL sales in Q2 by 1.4%.

 

Within Retail, TradePro sales continue to perform strongly, up 14% in the
half, reflecting a healthy pipeline of work for local trade professionals and
continued sign-ups to the TradePro scheme.  Active TradePro members have
increased by 18% year-on-year to 541,000.  DIY sales remain in moderate
decline as customers continue to focus on smaller projects.

 

Design & Installation delivered sales(3) in the half reflected the
continued soft consumer appetite for larger ticket purchases and a strong
comparative in H1 2023.  Ordered sales(4) in the first half have shown a
single digit year-on-year decline.  Our ongoing strategic focus on our
lower-priced Wickes Lifestyle Kitchens(5) continues to deliver good results,
with sales up 18.8% year-on-year in H1.

 

The Solar Fast acquisition completed on 21 May and we have recently rolled out
Solar Fast point-of-sale assets in 50 of our stores and launched the digital
journey on the Wickes website.  Our 51% stake will be fully consolidated from
the date of completion and included in Design & Installation sales.

 

Reflecting our continued focus on tight cost management, our planned
productivity initiatives include savings in distribution and the cost benefits
from technology investments in customer service.  In addition, recently
implemented changes to our Design & Installation operation, to simplify
and improve the customer experience, will result in further cost savings.

 

Investment in our strategic growth levers continues, with two new stores
opened in the half, in Long Eaton and Durham.  We have refitted three stores
and continue to see return on invested capital of over 25% from our refit
programme, which has now covered c.78% of the store estate.

 

The balance sheet remains strong with net cash at the half year of £151.5
million.

 

Whilst the trading environment remains uncertain, given the resilient first
half in Retail and our continued focus on costs, the overall outlook for
adjusted profit before tax for 2024 remains unchanged.

 

We expect to report half year results in early September 2024.

 

 

David Wood, Chief Executive of Wickes, commented:

 

"Our excellent value and service-led offer gives DIYers and tradespeople
reason to keep coming back to Wickes.  Against a challenging trading
backdrop, we have grown volume and taken further market share in Retail, with
our TradePro scheme continuing to show strong momentum as local trade
professionals turn to Wickes to save them time and money.  We're seeing good
demand for our lower-priced Wickes Lifestyle Kitchens, reflecting customers'
desire for quality and value.  We continue to invest in our growth levers and
are particularly excited about the recent acquisition of Solar Fast."

 

 

Enquiries

 Investors and Analysts                                             Media

 Holly Grainger                                                     Lucy Legh, Will Smith, Eleanor Evans

 Director of Investor Relations                                     PR Advisers to Wickes

 +44 (0)7341 680426                                                 +44 (0)203 805 4822

 holly.grainger@wickes.co.uk (mailto:holly.grainger@wickes.co.uk)   wickes@headlandconsultancy.com (mailto:wickes@headlandconsultancy.com)

 

 

 

About Wickes

 

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
- TradePro, DIY (together reported as Retail) and our project-based Design
& Installation division.

 

Wickes operates from its network of 229 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.

 

 

 

Footnotes

 

1) Retail refers to the revenue stream formerly described as Core.  Retail
revenue relates to products sold directly to customers (both DIY and local
trade), in stores or online.

2) Design & Installation refers to the revenue stream formerly described
as DIFM or Do-it-for-me.  Design & Installation revenue relates to
projects such as kitchens and bathrooms, sold by our showroom Design
Consultants.  Revenue is recognised when delivery and installation (where
applicable) is complete.  Design & Installation includes Solar Fast.

3) Delivered sales refers to the revenue which is recognised when the Group
has satisfied its performance obligation to the customer and the customer has
obtained control of the goods or services being transferred.

4) Ordered sales refers to the value of orders at the point when the order has
been agreed.

5) Sales of Wickes Lifestyle Kitchens which include a design element are
classified as Design & Installation revenues, whereas Self Serve purchases
of the Wickes Lifestyle Kitchen range are classified as Retail revenues.

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