Interim Results 2022
Wickes Group plc - Interim Results 2022
for the 26 weeks period to 2 July 2022
Record first half sales with further market share gains in a challenging macro backdrop
Financial Highlights
- Revenue growth of 1.3% to £822.3m (H1 2021 £812.0m) against strong prior year comparatives
- Further market share gains in Core1, and a strong recovery in delivered DIFM sales
- Like for Like (‘LFL’)2 sales up 0.8%, and 23.4% on a three-year basis
- Adjusted profit before tax £45.6m (H1 2021 £46.5m)
- Reported profit before tax of £33.5m reflecting primarily IT separation costs (H1 2021 £35.7m)
- Net cash position of £166.5m (H1 2021 £204.2m), improved from the year end position of £123.4m reflecting the normal working capital cycle in the business
- Net debt £558.5m (H1 2021 £564.8m)
- Interim dividend declared of 3.6p (H1 2021 2.1p), reflecting our intention to maintain the same full year cash dividend as FY 2021
Operational Highlights
- Acceleration in membership growth of our TradePro loyalty scheme, with around 10,000 new customers signing up each month and a current base of over 700k
- Overall Core LFL -5.5% against buoyant prior year sales; profit contribution declined although market share was up reflecting the strength of our leading value proposition
- Recovery in DIFM delivered sales, up 29.7% LFL, with strongly improved profitability as we work through the order book which at £136m remains significantly ahead of the prior year
- Acceleration of store refit programme with 11 planned for the full year; returns and sales uplifts against heritage stores remain over 25%
- First new store set to open in Q4 in Bolton, as we look to open 20 new stores over five years
- Launched 30 minute click & collect and increased home delivery capacity by 10%
- Submitting Science-Based Targets for carbon emissions reduction by the end of September
Current Trading & Outlook
As guided in our 26 July trading update, we have seen a recent softening of the DIY market from the very high levels of demand experienced during the pandemic. While the macroeconomic environment remains uncertain, we are confident that we have the right model to continue outperforming the market. We reaffirm our guidance for full year adjusted PBT in the range of £72 - 82m.
1 Source: GfK GB PoS data, sourced from GfK DIY Category Reporting June 2022
2 For a definition of LFL sales, see note 3 of the interim financial statements
David Wood, Chief Executive, commented:
"“This was a half in which we achieved record sales, as customers continued to be attracted to our market leading value, choice and availability and I would like to thank all my colleagues for their hard work and support in delivering these results. While market volumes have declined, we have made further market share gains and delivered a particularly strong performance in Trade, with an acceleration in the rate of sign-ups to our TradePro membership scheme.
David Wood Chief Executive
In DIY, we continue to cater for an increased number of younger customers who first turned to home improvement during the pandemic, while in DIFM, delivered showroom sales have remained robust as we launched new kitchen and bathroom ranges and worked through the elevated order book.
As previously stated, we have seen some softening in the DIY market from the very high levels of demand experienced during the pandemic. However, we continue to outperform the wider home improvement market and our confidence in our long term strategy is unchanged, reflected in our continued investment to drive further growth.
Looking ahead, we remain confident that our uniquely balanced business model, coupled with our market-leading value, leaves us well-positioned within a large and growing home improvement market."
Summary of half year financial results
£m | 26 weeks to 2 Jul 22 | 26 weeks to 26 Jun 21 | Change |
Revenue Core DIFM | 822.3 632.6 189.7 | 812.0 666.7 145.3 | 1.3% (5.1)% 30.6% |
Gross profit Gross profit % | 292.6 35.6% | 294.8 36.3% | (0.7)% |
Adjusted* operating profit Adj operating profit % | 56.3 6.8% | 61.9 7.6% | (9.0)% |
Adjusted* profit before tax | 45.6 | 46.5 | (1.9)% |
Adjusted* basic earnings per share | 14.5p | 14.6p | (0.7)% |
Reported operating profit Operating profit % | 44.2 5.4% | 51.1 6.3% | (13.5)% |
Reported profit before tax | 33.5 | 35.7 | (6.2)% |
Basic earnings per share | 10.7p | 13.5p | (20.7)% |
Interim Dividend | 3.6p | 2.1p | 71.4% |
*Adjusted measures represent results on an IFRS basis and exclude adjusting items which comprise significant restructurings, significant write downs or impairments of current and non-current assets, the costs of demerging and listing the business, the associated costs of separating the business from the Travis Perkins Group’s IT systems, and the effect of changes in corporation tax rates on deferred tax balances (see note 2 of the interim financial statements for a detailed explanation of these items). These measures have been explained, reconciled and calculated in note 14 of the interim financial statements.
Investor & Analyst meeting
A webcast for investors and analysts will be available today at 9.00am (UK time), followed by a live Q & A with the Wickes management team. The webcast can be accessed at: Wickes - Interim Results (brrmedia.co.uk)
A recording of the webcast will be available on the Wickes Group plc website later today: https://wickesplc.co.uk
Contacts
Wickes
Investor Relations
Andy Hughes
+44 (0) 776 736 5360
investorrelations@wickes.co.uk
Headland
PR Adviser to Wickes
Lucy Legh, Will Smith, Charlie Twigg
+44 (0) 0203 805 4822
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 - Local Trade, DIY (together "Core") and Do-it-for-me ("DIFM").
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.
Forward looking statements
This announcement may include statements that are, or may be deemed to be, forward-looking statements. By their nature forward-looking statements involve opportunity, risk and uncertainty since they relate to future events and circumstances, and actual results may differ materially. Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement.