Member Info for Raleigh

Need to do something about retrofit.
https://rcimag.co.uk/news/industry-reacts-to-queens-speech

This is what I'm on about. As it relates to smaller trade. Longer lead times. Yes, I know, it's the Guardian, but gives a flavour.
https://www.theguardian.com/business/2021/may/08/cost-of-building-work-on-uk-homes-to-rise-as-price-of-materials-soars

This is a post I put somewhere else, but I think applies here also. But, you know, everybody does their own thing.
Not a very good day all round. But probably a good day to buy more here if you want. There is this business with shortages. That, common to most construction related, will sort out, but may be putting a few off with that occupying some of the press at the moment. And anything they can't supply, will go into orders. It will have to.

Not a very good day all round. But probably a good day to buy more here if you want. There is this business with shortages. That, common to most construction related, will sort out, but may be putting a few off with that occupying some of the press at the moment. And anything they can't supply, will go into orders. It will have to.

Take a while to get rid of sellers. But their shares are being bought up at around this price.

Getting closer. That's on top of the telly mind. Got that. Colour one, it is.

It is hard to see some manager somewhere has not seen something in this. After all, the great unwashed did. I hope so. I'm saving for a rotary clothes line.

For the record, I think this is the last we heard from C D and R?
https://www.lse.co.uk/rns/SHI/holdings-in-company-eqh2d4n4p4waw8p.html

And there's always the chance another institution has been buying in. Speculation.

I don't make price forecasts, but obviously I see it going up, and the moves into underlying profit followed by bottom line in my mind will be newsworthy and I think mark step changes for investors. Yes, buy more please CD and R.
We know this little bit, but nice to see 'the papers' are taking some note.
https://www.thetimes.co.uk/article/construction-supplier-sig-has-last-years-damage-repaired-839p5dz0l

Speculation sounds much better.
This is what they said at the time, indicating the CD and R thing was the most appealing way out.

"If an equity raise in line with the above-mentioned timing is not successful, then the Group will have to take mitigating actions, including further discussions with the RCF lenders and the private placement noteholders regarding the basis upon which they may be willing to continue to support the Group (including the need for covenant waivers and access to further liquidity). Alternatives could include the option to conduct a post-summer equity raise (if available) or further disposals of assets (such as the disposal of one or more of the Group's operating businesses to facilitate a reduction of the Group's outstanding indebtedness) or a merger or acquisition transaction involving the Company (in each case if the consent of the RCF lenders and private placement noteholders is obtained). There remains the possibility of other investors interested in buying the company's shares outright should an alternative funding scenario be required."

Last one, just trying to set a scene here, to move on with.
https://www.proactiveinvestors.co.uk/companies/news/948158/wickes-awaits-a--wall-of-money--say-analysts-948158.html

All that is guesswork, isn't it? And I cannot say if it is on the cards or not. But looking at it today if I was IKO, who CD and R will probably need to persuade (having supported Sig over the years, and on the recapitalisation ) having regard to the progress now being made I would want a 'decent' premium on my total investment.

Little bit more from demerger circular, on management incentive.
"The potential bonus opportunity under the remuneration policy will be set at 140 per cent. of salary for the Wickes Chief Executive Officer and 120 per cent. of salary for the Wickes Chief Financial Officer. Performance measures and targets will be determined by the Wickes Remuneration Committee at the start of the financial year, with financial targets accounting for at least 80 per cent. of the targets. In the first year of operation, 70 per cent. of the target set will be measured against profit, 20 per cent. against cash performance and 10 per cent. will be against measurable Environmental, Social and Governance (“ESG”) objectives."

Things have to settle out here, there will be those who want to go, not wanting part of a business catering to a mix of 'smaller trade and retail', albeit one which has been preparing to take on the competition for getting on 2 years, and transitioning where it counts to the online model which the public have increasingly come to expect.

The following 2 paras. are extracted from the demerger circular https://www.travisperkinsplc.co.uk/sites/travis-perkins/files/merger-docs/class-1-circular.pdf

The Wickes Group demonstrated strong performance in 2020, in spite of challenging conditions as a result of the COVID-19 pandemic. Revenue grew by 5.0 per cent. from £1,295.1 million in 2019 to £1,359.7 million in 2020, supporting Adjusted Operating Profit of £76.8 million, despite an estimated decline in the broader home improvement market in which the Wickes Group operates. ( insert - indicates increasing market share )The strength of the Wickes Group’s underlying performance in 2020 enabled it to return COVID-related business rate and Job Retention Scheme support of £38.8 million to the UK government. ?Dividend policy for the Wickes Group ?The Wickes Group is a strongly cash generative business and the Wickes Board recognises the importance of balancing investment in the business with dividends to shareholders. The Wickes Board intends to adopt a progressive dividend policy and currently expects to start with a dividend of 30 per cent. of adjusted profit after tax in respect of the full financial year ending 1 January 2022, split approximately one-third and two-thirds between interim and final dividends, respectively. The Wickes Group intends to put in place a dividend re-investment plan following Admission.

First quarter trading update from Travis Perkins for Wickes (to 27th. March.)
"Wickes like-for-like sales performance continued to be strong at 19.7% in Q1, 25.6% ahead on a two year basis. The excellent Core performance seen in the second half of 2020 has continued into the current year with Q1 like-for-like sales at 38.5%. This performance was delivered across a broad range of product categories and was driven by Wickes digital capability, with continued high participation of customer delivery and click and collect fulfilment.
 
With DIFM showrooms remaining closed throughout the quarter, which included the key winter sale period, the recently developed digital DIFM journey enabled Wickes to maximise the opportunity available in the market. Q1 DIFM like-for-like sales declined by (25.0)% on a delivered basis, and orders through the winter sale period were down by around (50)%.
 
Performance of Core through the Easter trading period remained strong, benefiting from continued positive engagement in DIY and buoyant local trade, together with ongoing restrictions in the wider non-essential retail market, which eased on 12th April."

?

https://www.mortgagestrategy.co.uk/news/construction-output-sets-pace-as-inflation-pressure-mounts-pmi/

Citi agree for starters.

Citi starts coverage of Wickes at 'buy'

Fri, 7th May 2021 07:50
(Sharecast News) - Citi has initiated coverage on shares of Wickes with a 'buy' rating after its demerger from Travis Perkins.
The bank, which set a price target of 282p, said Wickes has been a strong outperformer within the retail home-improvement sector in the UK and currently benefits from a robust DIY demand backdrop.

"We are buyers of the stock as we see solid structural growth drivers over the medium term (we estimate 2023e earnings circa +17% above 2019) in the fragmented home improvement landscape and the group's leading brand position with digitally-led growth focus should support higher cash returns to shareholders," it said.

Builders' merchant Travis Perkins completed the demerger of DIY and home improvement retailer Wickes at the end of April.

Bit outdated, but just a little more confirmation of relative health of the large construction sector.

Number of furloughed construction workers falling faster than wider economy
By Tom Lowe7 May 2021

Latest HMRC data shows size industry’s furloughed workforce shrank by 15% in March
The number of furloughed construction workers fell by as much as 15% in March, over 3% more than the national average across all sectors.
The latest HMRC data shows that there were around 196,000 workers in construction furloughed at the end of March, compared to over 230,000 at the end of February.
…

Barratt gave a solid update today. Some comment on raised input costs.(3%)
https://www.lse.co.uk/rns/BDEV/trading-statement-nm9zxi2nww5z6lv.html

And across the board, following management change and recapitalisation Sig is improving it's position within the market. "Customer numbers are rising and we are regaining market share......"
Thus bringing forward earlier expectations. "The momentum we have seen through March and April, together with improving visibility on the near-term order book, means that we now expect the Group to deliver an underlying operating profit in the first half, returning the Group to profitability earlier than expected.
 Given the prevailing macro-economic uncertainties, we retain a cautious view of the second half at this stage. We do however continue to expect the second half to be both profitable and cash generative, and in light of the stronger than anticipated recent performance we now expect full year revenues to be slightly ahead of prior expectations, and profits also to be higher than previously expected."

Yes, and they seem to be particularly feeling the world trend in the USA. One of my sons lives Massachusetts. . Lots of wooden buildings, housing. He was on to me about it last week. Sawmills can't keep up with demand, pushing prices up, so if you want it now, battens or bigger, you have to pay the price.