Wickes upgrades profit expectations as sales surge

DIY retailer Wickes said on Tuesday that it now expects full-year adjusted pre-tax profit to be within the top half of the range of analyst expectations as it reported a surge in year-to-date sales.

The current range of expectations is between £55m and £74m. The company - which was recently demerged from Travis Perkins - also said it expects half-year adjusted pre-tax profit of around £45m.

Wickes said group sales have continued to perform strongly, with total like-for-like growth in the 21 weeks to 22nd May up 45.7% year-on-year, or 23.1% higher on a two-year basis against the equivalent period in 2019.

Trading was "notably" strong through April, it said, driven by sales volumes in both local trade and DIY and continued to be underpinned by the company’s digital capability. Wickes said trading in May has settled back in line with expectations.

Chief executive officer David Wood said: "At Wickes, we are here to help the nation feel house proud, and I am delighted with how the entire business has responded to the continued strong demand for our products and services.

"Availability constraints and inflationary pressures across some raw materials have been well-flagged, but we have strong supplier relationships and are working closely with them to ensure we continue to provide customers with the products they need at the best possible value."

At 0915 BST, the shares were up 4.4% at 267.37p.

AJ Bell financial analyst Danni Hewson said: "The company operates in a fragmented market which is benefiting from a post-Covid home improvement boom so now is a pretty good time to strike out on its own following its split from Travis Perkins.

"Basically if the company can’t make it work now then it would never be able to. Wickes has exposure to both DIYers and, for those who have accepted their limitations, the ‘Do It For Me’ brigade given its significant business selling to trade customers.

"There is only a brief mention in today’s update of supply issues despite widespread evidence that the cost and availability of some materials is an increasing problem.

"The danger is that enthusiasm for domestic renovations hits the obstacle of prohibitive costs and delays, thus stopping the current boom in its tracks.

"This could leave Wickes exposed in a competitive market and remind investors why Travis Perkins was keen to spin off the business in the first place."