Wickes on track but H1 profits dented by IT costs

Wickes said it remains on track to hit forecasts this year after a solid first half, though profits were hit by ongoing IT expenses as it continues to separate its backend systems away from previous owner Travis Perkins.

The DIY retailer and trade merchant said statutory pre-tax profit declined to £21.1m in the first half ended 1 July, down from £33.5m the year before, after booking £7.4m in IT separation costs during the period as well as unrealised losses relating to FX derivatives of £2.6m, compared with a £4.3m gain the year before.

Adjusted profits before tax and SaaS IT investment costs came in a £34.8m, down from £41.3m previously, as cost inflation exceeded top-line growth.

Full-year adjusted profits before tax are still expected to be in line with market consensus in the range of £45m-48m.

Revenues rose just 0.7% year-on-year to £827.7m in the first half, as 5.9% growth in the 'Do It For Me' (DIFM) segment (to £200.9m) was dampened by a 0.9% drop in core local trade and DIY sales (to £626.8m).

"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," said chief executive David Wood.

"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."

The company declared an interim dividend of 3.6p, unchanged on last year, and reiterated its commitment to keeping the full-year payout the same too.

The stock was down 0.6% at 137.68p in early deals on Tuesday.