1X2 - PAUL SCOTT comments - Stockopedia - WIX6 Dec 2021 20:54
I looked at Wickes at the time of its interim results and came away with a generally favourable impression, so the slide in share price recently has come as a surprise. Sadly I didn’t get the chance to finish my research ahead of today’s unscheduled update.
Christopher Rogers, the chairman, joined the Wickes team ahead of its demerger, stepping down from the board of Travis Perkins where he was senior independent director and NED since 2013. He says the demerger was thoughtfully executed and well planned. David has assembled a strong team here, one focused on creating medium term value for all stakeholders via a continuous focus on improving relevance and DIFM (‘Do It For Me’).
This is not straightforward for other retailers to replicate and the group’s strong digital presence (two thirds of business was digital in 2021) means it is a uniquely balanced business with a clear and distinctive place in the market. As a standalone business, it is better positioned than ever before to capitalise on growth opportunities.
Trading update
Resilient trading and strong margin performance, FY2021 profit guidance raised… raises FY2021 adjusted PBT guidance to no less than £83m.
Wickes has continued to perform well in the fourth quarter to date, benefitting from its balanced business model, with sales in line with expectations.
Delivered sales in Do It For Me (DIFM) are strengthening as it works through an elevated order pipeline. It also expects a higher carry over order book in DIFM, supported by continued strong sales which will benefit the first half of FY2022.
Core sales are lower year-on-year against tough comparatives but remain ‘materially ahead on a two-year basis’ driven by a further strong performance from local trade.
The group credits a better than expected margin performance to its agile business model and strong supplier relationships, with rising inflation and freight costs mitigated.
David Wood, CEO of Wickes comments:
This has been a period of further progress for Wickes, where our focus on value, stock availability and exceptional service have underpinned our customer offer. Our forward planning and early strategic decisions have resulted in an improved profit performance, and we continue to navigate inflationary pressures and raw material constraints well. Clearly, this remains a time of uncertainty, however our differentiated business model leaves us well-placed to continue to outperform within a large and growing home improvement market.
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