- Wickes’ adjusted pre-tax profits dived to £23.4m in the six months to 29 June
- The home improvement retailer’s statutory turnover fell by 3.4% to £799.9m
Wickes profits plunged by almost a quarter in the first half, as challenging market conditions led some customers to hold off on big ticket spending.
The home improvement retailer, which runs around 229 sites across the UK, revealed adjusted pre-tax profits dived by 24.8 per cent to £23.4million in the six months ending 29 June.
Although it achieved record market share gains in its retail arm, the group’s statutory turnover still fell by 3.4 per cent to £799.9million due to a 17 per cent drop in revenue from its design and installation ranges.
Wickes, which runs around 229 sites across the UK, reported its adjusted pre-tax profits dived by 24.8 per cent to £23.4million in the six months ending 29 June
Wickes said the result reflected a slowdown in the Covid-induced order book and a ‘softer market environment’ for big ticket installations.
However, the Watford-based firm experienced an 18.8 per cent increase in sales of its lower-priced lifestyle kitchens.
Its TradePro business also boasted a 14 per cent rise in revenues, thanks to active membership numbers jumping by 82,000 to 541,000.
Since then, Wickes has boosted its TradePro members to 1 million for the first time and observed improving trading conditions, supported by better like-for-like sales growth and a ‘stabilising’ design and installation division.
As a result, the company continues to expect it will make £40.4million in adjusted pre-tax profits this financial year.
David Wood, chief executive of Wickes, said: ‘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.’
Like many DIY retailers, Wickes enjoyed roaring trade for much of the Covid-19 pandemic as lockdown curbs compelled Britons to spend more time indoors.
Demand was further uplifted by cheaper mortgages, a temporary stamp duty cut, the accumulation of excess savings, and a growing desire among Britons to reside in larger properties.
Trade has flatlined since restrictions ended and mortgage costs were pushed up by the Bank of England’s successive interest rate hikes.
Julie Palmer, partner at Begbies Traynor, said: ‘With promises of more pain from the government at the autumn budget, consumer confidence may start to fall once again, which doesn’t bode well for Wickes.
However, she noted the firm’s cash-healthy balance sheet and flatlining operational costs ‘mean it’s well placed to ride out the current issues and deliver when the backdrop improves for consumers.’
Wickes Group shares were 1.2 per cent up at 167.2p on Tuesday morning, although they have still declined by around a third since the firm demerged from Travis Perkins in April 2021.
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