Trade revenues boost Wickes as DIY retailer upholds full-year guidance despite concerns of inflation-driven consumer cutbacks
- The house 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 on the firm has slowed as Covid-related travel restrictions have loosened
Wickes has reiterated its annual outlook due to continued record orders from local trade customers and robust growth in its fitting services business.
The house improvement retailer, which demerged from Travis Perkins 13 months ago, added that it had gained further market share despite a sturdy comparative performance within the prior 12 months.
Trade has slowed as Covid-related travel restrictions have loosened, yet Wickes said total revenues in the primary 20 weeks of the present financial 12 months only fell marginally from the identical period in 2021 and were consistent with forecasts.
Slight decline: Home improvement retailer Wickes said total revenues in the primary 20 weeks of the present financial 12 months only fell marginally from the identical period in 2021
Core sales declined by 7.2 per cent, however the impact has been limited by the number of latest TradePro scheme customers soaring by over 40,000 up to now this 12 months.
Order books amongst trade consumers remained at their highest levels ever.
The core sales decline offset revenue growth of 30.4 per cent within the group’s Do It For Me (DIFM) business, which benefited from strong demand over the winter period and a better than usual variety of orders at the tip of last 12 months.
Nonetheless, the boom in house renovations 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-Covid volumes.
Chief executive David Wood said the outcomes were a ‘testament to the strength of our uniquely balanced business – across Trade, DIY and DIFM.’
Britain’s DIY sector has experienced a roaring trade since 2020 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 rates of interest on mortgages, a brief stamp duty holiday, the build-up of excess savings by Britons, and a growing desire amongst homebuyers to live in additional spacious properties.
Boom time: Britain’s DIY sector has had a roaring trade since 2020 as a consequence of a pandemic that has caused Britons to spend a greater period of time indoors
There are concerns inside the industry that current supply chain headwinds and the worsening cost-of-living crisis could cause a big setback in trade.
Nevertheless, Wickes claimed it was ‘responsibly’ managing price increases inside its core division and still expects delivered sales in its DIFM division to exceed their pre-pandemic levels.
Its boss David Wood said: ‘Looking ahead, while we remain mindful of the uncertain macroeconomic environment, we proceed to be confident of the opportunities available to Wickes inside the large and growing home improvement market.’
Analysts at Investec and Peel Hunt have each maintained their buy suggestion for the corporate, which they estimate will earn revenues approaching £1.6billion and underlying earnings across the £220million mark this 12 months.
Wickes Group shares closed trading 2.5 per cent higher at 198.1p on Wednesday, although their value has plunged by over 1 / 4 previously 12 months.
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