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Resilient company buying back shares…… I expect these to rebound very soon
Definitely a bargain at 125p….. solid company
3rd. November 2023.
For clarity, I am in here for medium term growth and to a lesser degree for dividend.
I wonder if someone with more knowledge than me could explain what happens with the wix share price for the first few hours every day. There seems to be a large spread which closes up as the day progresses.
As I said, I’m not expecting to trade on marginal swings in price, just a point of interest really.
Growing our estate of new format stores
Our successful store refit programme continued with six refits in the first half at Shipley, Blackpool, Haverfordwest, Stafford, Nuneaton and Braintree. Sales uplifts remain strong, driven by an uplift in DIFM of over 50%. Our refitted stores also benefit from an improved order fulfilment layout which increases click & collect capacity. This is clearly resonating with customers with click & collect participation increasing across the chain.
Despite the impact of higher build costs, store investments continue to deliver a ROIC of over 25%. A further five refits are planned for the second half.
Our new store opening programme is gathering pace. One new store opened in July at Chelmsford, and we expect two further openings at Widnes and Torquay in the second half. We remain confident in the opportunity to expand our proven model into 20 new locations over a five-year period.
Winter weather on its way,fences and anything else exposed to the elements potentials for damage and replacing.
KGF getting a real beating for those results, but mainly due to their overseas operations so no real read across to WIX. Just sector sentiment taking a hit today.
Kingfisher 6 month results today. Whilst trading strongly in UK, downgrades profit expectations.
As reported by Wickes.
“On a Pre-IAS38 Adjusted PBT basis, the Company is comfortable with the market consensus for FY2023, being a range of £54.5-57.0m.”
Exercises nil cost options. Sells sufficient within buyback to cover costs.
https://www.lse.co.uk/rns/WIX/directorpdmr-shareholding-s89qjtftrjq85uj.html
In fact, I think it smacks of being thrown together from one RNS. No mention of new capital allocation policy, share buy-backs and more.
Found that a bit strange write-up. Sounds rather negative, then says BUY.
Should be IFRS 16 2019.
Wickes pre-tax profit halves due to administrative costs
The home improvement retailer still looks good in the long run, despite its issues
September 13, 2023
By Mitchell Labiak
* Paltry revenue growth
* Larger cash holding
On its own terms, Wickes' (WIX) £7.4mn IT cost was a small price to pay for its divorce from Travis Perkins. However, when combined with a hike in other backroom costs, including IT investment, bonus payments and "modest inflation in support centre costs", it added up to £20.8mn. It was enough to slash its pre-tax profit for the six months to 30 June by almost 40 per cent.
The fact dividend payments remained at 3.6p per share is perhaps a sign Wickes is confident in its underlying performance. After all, revenue did grow – albeit marginally. The drop in DIY sales was offset by growth in what the company calls “DIFM” (do-it-for-me), whereby customers who buy items such as kitchens and bathrooms get them built as a service.
Wickes believes things will improve, saying it is “comfortable with FY consensus expectations [of] adjusted pre-tax profit of £45mn to £48mn after the impact of SaaS IT investment costs”. According to the consensus of analyst forecasts from FactSet, pre-tax profit will grow to £66mn by the end of 2025, while earnings per share will reach 21.1p. It would give the stock a price to 2025 forecast earnings ratio of 6.7 times, which is good value if those forecasts prove correct.
The big bear point is that its net debt is 293 per cent of its equity. The bulk of its liabilities are its leases for shops, which enables it to trade, but Wickes is aware of its need for a healthier balance sheet and is filling up its coffers with cash accordingly. It's a prudent move and a trend we hope will continue. Buy.
Last IC View: Buy, 143p, 23 Mar 2023
I don’t consider it’s much of a bear point, as pre IFSR 16 2919 accounting measures Wickes would have been viewed as having no debt at all, but now has to include total monies that will fall due to be paid throughout the remainder of the lifetime of the lease. Fact is, they pay as they go, as payments fall due, and will continue to do so.
Yes Culpepper. Wix have a lot of non cash charges in respect of leases which means cash flow is materially higher than pre tax profit.
I think this an excellent hold with 8% yield guaranteed with as you say propect of SP gain or potentially special dividends. Strong hold for me.
Just in passing, I read opinion that Liberum anticipates that with cash in hand at an annual low point at year end, and £50m being the company new primary cash metric, dividend satisfied etc., excess cash will be utilised for ongoing buyback, aimed at increasing eps.
Extremely cheap.
https://citywire.com/funds-insider/news/expert-view-wickes-4imprint-keywords-studios-darktrace-and-ashtead-technology/a2425603
I expect they’ve been hedging exposure to foreign suppliers.
If you find out, maybe you could let us know out of interest.
Why are they dabbling in FX derivatives?
Little more comment.
https://uk.finance.yahoo.com/news/wickes-diy-sales-slide-refurbishments-150011562.html
That's what I'm hoping Makros.
I can't see much downside risk and the dividend is not far shy of 8%. Definitely a hold for me.
I'm here for a buy out or £2 plus
With it's strong cash position , decent trading and low multiple compared to peers surely it must be on someone's radar at these levels?? what do others think?
Thanks Culpepper. I'm not getting the IT costs.
The detailed adjusting item note describes these as mainly one off data separation closing old system developing new one.
Logic would suggest a dip in profits to accomidate one off expenditure and a rise thereafter.
The summery note then confirms the separation is complete but the cost saving will be subsumed by costs of the new IT system.
Post separation we have been left with a much more expensive IT system let's hope it feeds through to the bottom line and some business benefits.
Very short summary.
https://www.proactiveinvestors.co.uk/companies/news/1026175/wickes-holds-dividend-as-half-year-profit-falls-1026175.html