26 January 2024
Wickes Group plc - Trading
Update for the 52 weeks to 30 December 2023
Full year LFL sales in line
with prior year;
Adjusted PBT expected at
upper end of consensus range
Wickes Group plc ("Wickes" or "the
Group"), the leading home improvement retailer, today provides a
trading update for the 52 weeks to 30 December
2023.
Full year Group LFL sales of -0.3%
were in line with prior year. Cash at the year end was £97.5m
after £10.1m of share buybacks, in line with guidance, reflecting
strong cost and stock control. Given our working capital
cycle, average cash across the year was £155m.
Adjusted PBT for FY23 is expected to
be at the upper end of market consensus range of £44.9-£48.3m on a
post-IAS38 basis.
Core (product sales to Trade and DIY
customers)
We delivered a good performance in
Core in 2023 with LFL sales in line with the prior year. The
fourth quarter saw positive LFL sales growth of 1.2% representing
the third consecutive quarter of growth in Core revenue. This
performance was driven by positive volume growth, with slight
selling price deflation in the quarter.
Double digit growth in TradePro
sales continued in Q4, underpinned by strong growth in our TradePro
customer base, which ended the year at 881k (+18% year-on-year).
DIY sales remained moderately down year-on-year in Q4, however we
experienced strong volume growth in a number of strategically
important categories including timber, joinery, decorating and
flooring.
Once again, our market
share1 increased in 2023 and is significantly up on a
three-year view, despite a decrease in store numbers, demonstrating
the strength of the business model and the success of our growth
levers.
Do-It-For-Me (projects led by Design
Consultants)
DIFM LFL delivered sales were
slightly down for full year 2023. The Q4 LFL sales decline of
-13.7% reflected a more subdued consumer environment for larger
projects, as well as delivery delays from the new software
implementation (previously noted in our Q3 trading update). This
software issue has been addressed and will not impact delivered
sales in 2024.
Current trading and outlook
Adjusted PBT for FY23 is expected to
be at the upper end of the market consensus range of £44.9-£48.3m
on a post-IAS38 basis.
During the first few weeks of Q1,
trading in Core has been in line with the prior year. In DIFM, we
expect delivered sales in Q1 2024 to be lower year on year, as a
result of the expected normalisation of the order book post-Covid
and fewer new leads in the market.
Growth strategy
Investment continues into our proven
growth levers of store expansion, store refits, digital capability
and exceptional customer service. There were two new store
openings during Q4 (three in total for 2023) as well as four refits
(11 in total for 2023) and we have a good pipeline of refit and
store opening activity for 2024. Our distinctive customer service
model has once again delivered great service for customers with
record customer satisfaction scores in 2023.
David Wood, Chief Executive of Wickes,
commented:
"Our colleagues' relentless focus on value, availability and
service has delivered record customer satisfaction and market
share. We have delivered a robust sales performance in the year,
against a challenging market backdrop, and with a tight control on
costs we expect to achieve a full year profit outturn at the upper
end of market expectations.
"We remain confident in our growth levers and in 2023 we have
invested further in new stores, refits and our digital
capability. This leaves us well-placed to continue to
outperform the market in 2024 and beyond."
LFL
sales 2023
|
Core2
|
DIFM3
|
Total
|
Quarter 1
(13 weeks to 1 Apr)
|
(4.4)%
|
6.2%
|
(1.8)%
|
Quarter 2
(13 weeks to 1 July)
|
2.3%
|
5.3%
|
3.0%
|
Quarter 3
(13 weeks to 30 Sept)
|
1.1%
|
(5.5)%
|
(0.5)%
|
Quarter 4
(13 weeks to 30 Dec)
|
1.2%
|
(13.7)%
|
(2.6)%
|
Full year
(52
weeks to 30 Dec)
|
0.1%
|
(1.7)%
|
(0.3)%
|
1) GfK GB PoS
data, sourced from GfK DIY Category Reporting December
2023
2) 'Core'
revenue relates to products sold directly to customers (both DIY
and trade) in stores or online.
3) 'DIFM' or
Do-it-for-me revenue relates to kitchen and bathroom projects sold
by our showroom Design Consultants. Revenue is recognised
when delivery and installation (where applicable) is
complete. DIFM LFL sales for Q3 have been revised, from -4.4%
to -5.5%.
Enquiries
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 our project-based Do-it-for-me
("DIFM") 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.