Wickes profits fall as customers cut back on major DIY projects
- Wickes’ adjusted pre-tax profit fell to £23.4m for the six months to June 29
- The DIY store’s statutory turnover fell 3.4% to £799.9m
Wickes’ profits fell by almost a quarter in the first half of the year as tough market conditions led more consumers to postpone large orders.
The DIY chain, which has 229 stores in the UK, said adjusted pre-tax profit fell 24.8 percent to £23.4 million in the six months to June 29.
Despite its retail market share reaching a record high, the group’s statutory turnover fell by 3.4 per cent to £799.9 million, driven by a 17 per cent decline in sales from its design and installation products.
Wickes, which operates about 229 sites in the UK, reported adjusted pre-tax profit fell 24.8 percent to £23.4 million in the six months ended June 29
Wickes said the result reflected a Covid-induced slowdown in the order book and a “softer market environment” for large purchases, reducing demand for categories such as tiles and flooring.
However, the Watford-based company saw sales of its budget lifestyle kitchens rise by 18.8 percent.
TradePro’s turnover also increased by 14 percent, thanks to an increase in the number of active members by 82,000 to 541,000.
Since then Wickes has increased its TradePro membership to 1 million for the first time and has seen improving trading conditions, supported by improved like-for-like sales growth and a ‘stabilising’ design and installation department.
The company still expects to make an adjusted pre-tax profit of £40.4 million this financial year.
David Wood, Wickes managing director, said: ‘We are on track for the remainder of the year and are encouraged by trading at the start of the second half.
‘Looking further ahead, our excellent customer offering, proven growth drivers and focus on cost control position us well in a home improvement market that continues to offer significant opportunities.’
Like many DIY stores, Wickes enjoyed booming sales during much of the Covid-19 pandemic, as lockdown measures forced Britons to spend more time indoors.
Demand was further boosted by cheaper mortgages, a temporary reduction in transfer tax, the build-up of excess savings and a growing desire among Britons to live in larger homes.
Trading has stagnated since restrictions were lifted and mortgage costs have risen as the Bank of England has rolled out successive interest rate hikes.
Julie Palmer, partner at Begbies Traynor, said: ‘With the government promising more pain at the autumn budget, consumer confidence could fall again, which bodes ill for Wickes.
However, she noted that the company’s healthy balance sheet and stable operating costs “mean the company is well positioned to weather the current challenges and deliver when conditions for consumers improve.”
Wickes Group shares were up 1.2 percent at 167.2p on Tuesday morning, though they are still down by around a third since the company split from Travis Perkins in April 2021.
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