Interim Results 2024
Wickes Group plc - Interim Results 2024
for the 26 weeks to 29 June 2024
Resilient performance in H1
FY24 PBT outlook remains unchanged, underpinned by improved trend so far in Q3
Financial Highlights
- Total revenue of £799.9m (H1 2023: £827.7m) down -3.4% year-on-year
- Adjusted gross margin +24bps
- Operational costs flat year-on-year following planned management action taken to mitigate impact of inflation
- Statutory profit before tax of £22.9m (H1 2023: £21.1m)
- Adjusted profit before tax of £23.4m (H1 2023: £31.1m)
- Net cash position of £152.4m (H1 2023 £190.0m), after net initial payment for Solar Fast acquisition1 and £28.9m returned to shareholders
- Interim dividend declared of 3.6p
Strategic Highlights
- Record Retail2 market share3 with particular gains in the strategic categories of decor, garden, tiles & flooring; Positive volume performance and LFL4 sales growth in Retail
- Strong TradePro sales growth +14%, with growth in active members5 of 18% to 541,000 (H1 2023: 459,000). In September the total number of TradePro members hit the 1 million mark for the first time
- Successful focus on our lower-priced Wickes Lifestyle Kitchens6 range driving sales +19%
- Challenging market environment for large purchases led to 17% decline in Design & Installation7 delivered sales8 and high single-digit decline in ordered sales
- Investment in new stores and refits driving returns, with 3 refits completed and 2 new stores opened
- Initial roll-out of Wickes Solar, with point-of-sale assets in 50 trial stores and digital journey live on Wickes website
- Entry into the FTSE4Good index, recognising our Responsible Business Strategy
NB. Retail2 refers to the revenue stream formerly described as Core. Design & Installation7 refers to the revenue stream formerly described as DIFM or Do-it-for-me.
Current Trading & Outlook
Trading in Q3 so far has seen an improved trend; in Retail, LFL sales growth has strengthened and Design & Installation is stabilising. Whilst the market outlook remains uncertain, current trading along with the planned action taken to mitigate the impact of inflation underpins management’s outlook for adjusted PBT for FY 20249. Wickes’ proven growth strategy and balanced business model leaves us well positioned for growth as market conditions improve. Our Q3 trading update is expected to be released in late October.
David Wood, Chief Executive of Wickes, commented:
"This first half performance is testament to the hard work of all our colleagues and demonstrates the strength of our balanced business model. We achieved further volume growth and record market share gains in Retail, with TradePro remaining a key differentiator. The market for Design and Installation remained tough during the half and Wickes was not immune; nonetheless, we have seen a positive response to our value-led Wickes Lifestyle Kitchen range, which is growing strongly.
David Wood Chief Executive of Wickes
“We are on track for the remainder of the year and have been encouraged by trading at the start of the second half. Looking further ahead, our outstanding customer offer, proven growth levers and focus on cost control leave us well-placed within a home improvement market which continues to offer significant opportunities."
Summary of interim financial results
£m | 26 weeks to 29 June 2024 | 26 weeks to 1 July 202310 | Change |
Statutory revenue Retail Design & Installation | 799.9 633.2 166.7 | 827.7 626.8 200.9 | (3.4)% 1.0% (17.0)% |
Statutory gross profit Gross profit margin | 289.7 36.2% | 294.7 35.6% | (1.7)% +0.6ppts |
Statutory operating profit Operating profit margin | 34.9 4.4% | 32.0 3.9% | 9.1% +0.5ppts |
Statutory profit before tax | 22.9 | 21.1 | 8.5% |
Adjusted11 gross profit Gross profit margin | 289.2 36.2% | 297.3 35.9% | (2.7)% +0.2ppts |
Adjusted11 operating profit Adjusted operating profit margin | 35.1 4.4% | 42.0 5.1% | (16.4)% -0.7ppts |
Adjusted11 profit before tax | 23.4 | 31.1 | (24.8)% |
Adjusted11 basic earnings per share | 7.1p | 9.4p | (24.5)% |
Basic earnings per share | 6.9p | 6.3p | 9.5% |
Interim dividend | 3.6p | 3.6p | N/A |
Investor & Analyst meeting
A presentation for investors and analysts will be held today at 8.30am (UK time), followed by a Q&A with the Wickes management team. A live webcast can be accessed at: https://brrmedia.news/WIX_HY_24
A recording of the webcast will be available on the Wickes Group plc website later today: https://wickesplc.co.uk
Enquiries
Investors and Analysts Holly Grainger Director of Investor Relations +44 (0)7341 680426 | Media Lucy Legh, Will Smith, Eleanor Evans PR Advisers to Wickes +44 (0)203 805 4822 |
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.
Forward looking statements
This announcement has been prepared by Wickes Group Plc. To the extent it includes forward-looking statements, these statements are based on current plans, estimates, targets and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. Neither Wickes Group Plc, nor any of its officers, Directors or employees, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Wickes Group Plc does not undertake any obligation, other than in accordance with our legal and regulatory obligations, to update or revise any forward-looking or other statement, whether as a result of new information, future developments or otherwise.
Footnotes
1) The enterprise value of the 51% stake in Solar Fast was £5.1m. A further payment was made of £2.7m, representing Wickes’ 51% of the cash acquired on completion, of which £2.5m was subsequently repaid by way of dividend.
2) 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.
3) Source: GfK GB point of sale data, sourced from GfK DIY Category Reporting June 2024.
4) For a definition of like-for-like (‘LFL’) sales, see note 3.
5) Active members of the TradePro scheme are defined as those who have shopped with us in the last 12 months.
6) 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.
7) 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.
8) 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.
9) Consensus PBT for FY24 is £40.4m as at 19 August 2024.
10) For details of the prior period re-presentation, see note 2.
11) Adjusted measures represent results on an IFRS basis and exclude adjusting items including, but not limited to, significant restructurings, incremental costs relating to corporate transactions, significant write downs or impairments (or impairment reversals) of current and non-current assets, the associated costs of separating the business from the former parent company’s IT systems, net unrealised gains and losses on remeasurement of foreign exchange derivatives held at fair value and the effect of changes in corporation tax rates on deferred tax balances. See note 2 of the financial statements and both the Reconciliation of Alternative Performance Measures note and the Alternative Performance Measures note for a detailed explanation of these items.
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