Strategy continues to deliver, with positive first half LFL sales; full year expectations maintained.
- Revenue growth of 0.7% to £827.7m (H1 2022 £822.3m) driven by the sales uplift in DIFM1
- Core LFL -0.8%2 with growth in the second quarter as weather patterns normalised;
- DIFM delivered LFL sales up 5.8%2 as we continue to work through the elevated order book and with ongoing growth in ordered sales
- £34.8m adjusted profit before tax and SaaS IT investment costs3 (H1 2022 re-presented £41.3m4), with cost inflation exceeding revenue growth
- Adjusted PBT £31.1m after £3.7m of SaaS IT investment costs3 expensed as required by IAS38
- Reported profit before tax of £21.1m primarily reflecting IT separation costs (H1 2022 £33.5m)
- Cash position of £190.0m (H1 2022 £166.5m), improved from the year end position of £99.5m reflecting the seasonal working capital cycle in the business
- Interim dividend declared of 3.6p (H1 2022 3.6p), reflecting our intention to maintain the same full year cash dividend as FY 2022
- £25m share buyback programme under way
Operational and Strategic Highlights
- Our strategy continues to deliver with growth levers all supporting further market share gains5
- Continued strong growth in our TradePro loyalty scheme, with 65,000 new customers signing up in the first half, and a period end base of 811,000
- Launch of Wickes Lifestyle Kitchens, with a free design service, to capture a larger share of the mass market
- Improved click & collect capacity and service levels drive meaningful channel shift back to stores, reducing distribution costs
- Six refits in the first half, with 11 in total planned for the full year; ROIC in line with plan at >25%
- Three store openings in the second half, including Chelmsford in July, as the opening programme accelerates and we look to open around 20 new stores over five years
- Good progress on productivity gains, offsetting cost inflation with the exception of energy costs, as previously outlined
- Updated capital allocation policy announced in July, with a strong balance sheet supporting investment in growth levers and enhanced shareholder returns
Current Trading & Outlook
Trading in July and August has been in line with our expectations, and we continue to expect full year adjusted profit before tax in line with market consensus (£45-48m after the impact of SaaS IT investment costs). Our next trading update for the third quarter is scheduled for the end of October.
David Wood, Chief Executive, commented: “This was another positive period for the business, underpinned by the strength of our balanced business model and outstanding customer service delivered by our colleagues. We achieved a sales uplift and strong conversion rates in DIFM, while delivering another strong performance in Local Trade due to our market leading value on the lines that matter most.
“As we head into the Autumn, we are well-stocked with our extensive range of energy-saving products, as we look to support our customers in insulating their homes. While we remain mindful of the external environment, we are seeing customers turn to Wickes for our great value proposition. We are well on track for the remainder of the year and we have the right strategy in place to make further market share gains within the large home improvement sector.”