Trade revenues boost Wickes as DIY retailer upholds full-year guidance despite concerns of inflation-driven consumer cutbacks
- The home improvement retailer demerged from Travis Perkins 13 months ago
- Wickes saw core sales decline by 7.2%, but Do It For Me revenues surge 30.4%
- Trade at the firm has slowed as Covid-related travel restrictions have loosened
Wickes has reiterated its annual outlook thanks to continued record orders from local trade customers and strong growth in its fitting services business.
The home improvement retailer, which demerged from Travis Perkins 13 months ago, added that it had gained further market share despite a robust comparative performance in the prior year.
Trade has slowed as Covid-related travel restrictions have loosened, yet Wickes said total revenues in the first 20 weeks of the current financial year only fell marginally from the same period in 2021 and were in line with forecasts.
Slight decline: Home improvement retailer Wickes said total revenues in the first 20 weeks of the current financial year only fell marginally from the same period in 2021
Core sales declined by 7.2 per cent, but the impact has been limited by the number of new TradePro scheme customers soaring by over 40,000 so far this year.
Order books among trade consumers remained at their highest levels ever.
The core sales decline offset revenue growth of 30.4 per cent in the group’s Do It For Me (DIFM) business, which benefited from strong demand over the winter period and a higher than usual number of orders at the end of last year.
Nonetheless, the Covid-induced boom in home renovation over the past two years meant the Northampton-based company’s total revenues between January and 21 May were 22.4 per cent up on their pre-pandemic volumes.
Chief executive David Wood said the results were a ‘testament to the strength of our uniquely balanced business – across Trade, DIY and DIFM.’
Britain’s DIY sector has had a roaring trade in the past two years as a consequence of a pandemic that has caused Britons to spend more time indoors and accelerated the rise of hybrid working.
Demand has also been spurred by low interest rates on mortgages, a temporary stamp duty holiday introduced during the summer of 2020 and a growing desire among Britons to live in more spacious houses.
Boom time: Britain’s DIY sector has had a roaring trade in the past two years as a consequence of a pandemic that has caused Britons to spend a greater amount of time indoors
There are concerns within the industry that current supply chain headwinds and the worsening cost-of-living crisis could cause a significant setback in trade.
However, Wickes said it was ‘responsibly’ managing price increases within its core division and still expects delivered sales within its DIFM division to exceed their pre-pandemic levels.
Its boss David Wood said: ‘Looking ahead, while we remain mindful of the uncertain macro-economic environment, we continue to be confident of the opportunities available to Wickes within the large and growing home improvement market.’
Analysts at Investec and Peel Hunt have both maintained their buy recommendation for the company, which they estimate will earn revenues approaching £1.6billion and underlying earnings around the £220million mark this year.
Wickes Group shares were up 1.1 per cent to 195.5p during the early afternoon on Wednesday, although their value has plunged by over a quarter in the past 12 months.