Wickes boosted by sky-high energy prices amid booming demand for DIY retailer’s insulation products
- Wickes saw its total like-for-like sales swell by 11.5% in the final quarter of 2022
- Products like loft insulation and draught excluders were in significant demand
- The firm expects full-year adjusted pre-tax profits will be in line with forecasts
Revenue growth at Wickes improved towards the end of 2022 on strong demand for energy-saving goods, as shoppers looked to cut their household bills.
The home improvement retailer revealed that total like-for-like sales swelled by 11.5 per cent year-on-year in the final three months of 2022 after rising by only 2.6 per cent in the previous quarter and declining in the six months before then.
Trading during the previous winter season was dampened by delays caused by the emergence of the Omicron variant of Covid-19, which led to longer lead times as some consumers and staff members were forced to self-isolate.
Results: Wickes revealed that total turnover swelled by 11.5 per cent year-on-year in the final three months of 2022 after rising by only 2.6 per cent in the previous quarter
An absence of Covid-related restrictions in recent months helped sales in the Watford-based firm’s ‘Do It For Me’ fitting services division jump by over a third in the fourth quarter.
Core revenue also expanded by 5.2 per cent, bolstered by significant demand for energy conservation products like loft insulation and draught excluders.
The reopening of the UK economy and Russia’s war in Ukraine has been a primary driver of energy costs over the last year.
In addition, the UK’s housing stock is one of the draughtiest in Europe, a problem exacerbated by installation rates of energy efficiency products plunging after the UK Government abolished certain efficiency schemes a decade ago.
David Wood, chief executive of Wickes, said: ‘With the increased cost of living and colder winter months, we have seen more customers turning to Wickes for help to reduce their energy usage and bills.
‘We’re providing market-leading value on products, from loft insulation through to draught excluders, and customers are visiting our online Sustainable House Guide for great hints and tips on how to reduce energy and cut back on costs.’
Thanks to the solid end-of-year result, the London-listed group expects annual adjusted pre-tax profits to be in line with analyst consensus forecasts of between £72million and £76million.
However, it warned that energy costs would be about £10million higher in 2023, even with the recent slide in wholesale prices, while the decision to bring forward annual staff wage awards to January will add another £3.5million to its expenses.
Since the Covid-19 pandemic started, DIY businesses have experienced a surge in trade as cooped-up Britons with extra savings have looked to spruce up their properties or sought more spacious places to live.
Sales have been further strengthened by the introduction of a temporary stamp duty holiday in the summer of 2020, low unemployment, and low interest rates driving up demand for mortgages.
The volume of home renovations has slowed as inflation has squeezed incomes, mortgage rates have soared, people are spending more time outdoors and firms adopt a hybrid work model.
Wickes noted its order book at the end of December was down on the previous year, but remained far above 2019 levels, while its annual core sales have shot up by a third on pre-pandemic volumes.
Wickes Group shares were 4.8 per cent lower at 150.5p during the late afternoon on Tuesday, meaning their value has declined by over a quarter in the past 12 months.
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