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Wickes boosted by skyrocketing energy prices amid booming demand for insulation products from the DIY retailer
- Wickes saw its total like-for-like sales increase 11.5% in the last quarter of 2022
- Orders for goods such as attic insulation and draft strips rose sharply
- The company expects full-year adjusted pre-tax earnings to be in line with guidance
Sales growth at Wickes improved towards the end of 2022 on strong demand for energy saving goods as shoppers looked to lower their household bills.
The home improvement retailer revealed that its total like-for-like sales increased 11.5 percent year-over-year in the last three months of 2022, following a 2.6 percent increase in the previous quarter and only marginal growth in 2022. the six months before.
Trading during the previous winter season was dampened by delays caused by the emergence of the Omicron variant of Covid-19, leading to longer lead times as some consumers and staff members were forced to self-isolate.
Results: Wickes revealed that total sales in the last three months of 2022 are up 11.5 percent year-over-year, after rising just 2.6 percent in the previous quarter
In the absence of restrictions related to the coronavirus, sales of the Watford-based company’s ‘Do It For Me’ fitting division rose by more than a third in the fourth quarter.
Core sales also grew 5.2 percent, supported by significant orders for energy-saving products such as attic insulation and weatherstripping.
The reopening of the UK economy and the Russian war in Ukraine were the main drivers of gas and electricity costs over the past year.
In addition, the housing stock in the UK is one of the draftiest in Europe, a problem exacerbated by installation rates of energy saving measures plummet after the British government scrapped certain efficiency schemes ten years ago.
David Wood, chief executive of Wickes, said: ‘With the higher cost of living and colder winter months, we’ve seen more customers turn to Wickes for help to reduce their energy consumption and bills.
“We offer market-leading value for products from attic insulation to draft excluders, and customers visit our online Sustainable House Guide for great hints and tips on how to save energy and cut costs.”
Thanks to solid year-end results, the London-listed group expects annual adjusted pre-tax profit to be in line with analyst consensus forecasts of between £72m and £76m.
However, it warned energy costs would be around £10m higher in 2023, even with the recent fall in wholesale prices, while the decision to bring forward annual employee benefits to January will add a further £3.5m to spending.
Since the onset of the Covid-19 pandemic, DIY businesses have seen a surge in trade as locked-in Britons have sought to refurbish their properties or live in suburban and rural areas with extra savings.
Sales have been further bolstered by the introduction of a temporary stamp duty holiday in summer 2020, low unemployment and low interest rates boosting demand for mortgages.
The volume of home renovations has slowed as inflation has squeezed incomes, mortgage rates have risen, people are spending more time away from home and companies have adopted a hybrid working model.
Wickes noted that its order book at the end of December was lower than last year, but remained well above 2019 levels, while annual core sales skyrocketed by a third from pre-pandemic volumes.
Shares Wickes Group were down 4.3 percent at 151.3p just before trading closed on Tuesday, meaning their value has fallen by more than a fifth over the past 12 months.