Wickes: Brits still holding back on big-ticket items as DIY goods preferred
Wickes reported a mixed set of results for the half of the year, with consumers still unwilling to spend on big-ticket items but happy to buy DIY retail goods.
Overall group sales fell by 3.4 per cent in the 26 weeks to June 29 at the London-listed company.
Revenue in the second quarter fell by 3.6 per cent year on year to £436.2m.
Revenue from installations and home design dropped by 17 per cent in the first half, on “continued soft consumer appetite for larger ticket purchases”, the company said.
Further results show that Brits have been searching for low-cost home improvements: Wickes’ lower-priced Lifestyle Kitchen delivered an 18.8 per cent year on year increase in sales in the first half of the year.
Like for like retail sales rose by 0.6 per cent.
The company noted that retail growth was driven by volume, with price deflation of around 3 per cent.
David Wood, chief executive of Wickes, said:”Against a challenging trading backdrop, we have grown volume and taken further market share in Retail, with our TradePro scheme continuing to show strong momentum as local trade professionals turn to Wickes to save them time and money.
We’re seeing good demand for our lower-priced Wickes Lifestyle Kitchens, reflecting customers’ desire for quality and value. We continue to invest in our growth levers and are particularly excited about the recent acquisition of Solar Fast.”
Wickes’ results were “probably better than we were expecting”, analysts at Panmure Liberum said, “but there remains no positive catalyst for the shares”.
“We are all pinning our hopes that consumer confidence will deliver improved performance for “bigger ticket spending” in the second half of the year”, analysts added. They maintained a ‘Hold’ recomendation on Wickes.
The company opened two new stores during the half, in Long Eaton and Durham, and have refitted a further three.
It will look to “savings in distribution and the cost benefits from technology investments in customer service” to manage costs going forward, it said.
Wickes kept their full-year guidance unchanged.
This article has been updated to reflect the fact that the 3.6 per cent decline in revenue referred to a year on year change.