REG - Wickes Group PLC - Trading Update for the 16 weeks to 20 April 2024

WickesAnnouncement

01/05/2024 07:00

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RNS Number : 7041M  Wickes Group PLC  01 May 2024

 

1 May 2024

 

 

Wickes Group plc - Trading Update for the 16 weeks to 20 April 2024

 

Solid start to the year in Retail; challenging market conditions continue in
Design & Installation

Profit outlook for the year remains unchanged

 

 

The start of 2024 has seen a continuation of trends from the fourth quarter
last year and those highlighted at our recent full year results, with volume
growth in Retail(1) and a decline in Design & Installation(2). Overall
Group LFL sales for the first 16 weeks were down by 4.2% compared to the same
period last year, with both reporting periods including Easter trading.

 

Retail sales have demonstrated the continued appeal of Wickes' great value and
service-led proposition. LFL sales were up 0.6% in the period, with a fourth
consecutive quarter of positive LFL growth. Market share has also continued to
grow. With selling prices in mild deflation, the growth in Retail sales has
been driven by volume with an increased number of transactions. TradePro sales
continue to perform strongly, up 12% in the period, reflecting healthy order
books for local trade professionals and continued growth in the customer base,
which grew by a further 57,000 members.  DIY sales remain in moderate decline
overall; customers continue to be enthusiastic about home improvement but are
focusing on smaller projects. Building on this trend we have shown a strong
performance in our decorative categories with interior paint sales up 13%
year-on-year.

 

Design & Installation delivered sales(3) declined by 18.2%, reflecting a
particularly strong performance in the comparative period for the prior year,
when we were still benefiting from an elevated order book.  Ordered sales(4)
so far in 2024 have been in single-digit year-on-year decline, with strong
conversion rates partially offsetting a double digit decline in new leads, as
the market for larger ticket purchases remains challenging.

 

Our increased focus on our lower-priced Wickes Lifestyle Kitchens(5) range
continues to deliver strong results with sales in this range up 25% versus the
same period last year.

 

We continue to focus on tight cost management throughout the business. In
addition to planned productivity initiatives, we will deliver cost savings in
Design & Installation as a result of, and to help offset, the lower sales
volumes currently being experienced.

 

Investment in our strategic growth levers continues, with our first new store
of the year opening in Long Eaton in March and with two refits completed in
Ashford and Burgess Hill.

 

Whilst the trading environment remains uncertain, given the solid start to the
year in Retail and our continued focus on costs, the overall outlook for
adjusted profit before tax for 2024 remains unchanged.

 

We will hold an investor insight event in London on 16 May, focused on
TradePro, and will make presentation materials available on our website after
the event.

 

 

David Wood, Chief Executive of Wickes, commented:

 

"In the first few weeks of 2024 we have been encouraged that DIYers and local
trade professionals continue to turn to Wickes as a brand they trust for great
value and service and as a result we have once again grown market share.
Although the market for larger ticket items remains subdued, we have seen
strong sales growth in our Wickes Lifestyle Kitchens, which match customer
demand for quality with great value.

 

"While the external environment remains uncertain, our overall profit
expectations for the full year remain unchanged. Looking ahead, we continue to
invest for future growth with our programme of store refits, new store
openings and investment in both technology and Solar Fast, building an even
stronger Wickes for the future."

 

 

Enquiries

 Investors and Analysts                                             Media

 Holly Grainger                                                     Lucy Legh, Will Smith

 Director of Investor Relations                                     PR Advisers to Wickes

 +44 (0)7341 680426                                                 +44 (0)203 805 4822

 holly.grainger@wickes.co.uk (mailto:holly.grainger@wickes.co.uk)   wickes@headlandconsultancy.com (mailto:wickes@headlandconsultancy.com)

 

 

 

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
- TradePro, DIY (together reported as Retail) and our project-based Design
& Installation division.

 

Wickes operates from its network of 230 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.

 

 

 

Footnotes

 

1) Retail refers to the revenue stream formerly described as Core.  Retail
revenue relates to products sold directly to customers (both DIY and local
trade), in stores or online.

2) Design & Installation refers to the revenue stream formerly described
as DIFM or Do-it-for-me.  Design & Installation revenue relates to
projects such as kitchens and bathrooms, sold by our showroom Design
Consultants.  Revenue is recognised when delivery and installation (where
applicable) is complete.

3) Delivered sales refers to the revenue which is recognised when the Group
has satisfied its performance obligation to the customer and the customer has
obtained control of the goods or services being transferred.

4) Ordered sales refers to the value of orders at the point when the order has
been agreed.

5) Sales of Wickes Lifestyle Kitchens which include a design element are
classified as Design & Installation revenues, whereas Self Serve purchases
of the Wickes Lifestyle Kitchen range are classified as Retail revenues.

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