Wickes interim profits drop but trends improving

Wickes posted a drop in interim profit on Tuesday as revenues fell, but backed its profit expectations for the year as it said trends were improving.

In the 26 weeks to 29 June, adjusted pre-tax profit declined to £23.4m from £31.1m in the same period a year earlier, with revenues down 3.4% to £799.9m. Wickes said continued volume-driven growth in the retail segment was offset by like-for-like declines in Design & Installation.

On a statutory basis, pre-tax profit ticked up to £22.9m from £21.1m.

Wickes said it faced "significant" cost headwinds this year, with another rise in the National Minimum Wage as well as more general inflationary pressures across the business. However, the company’s planned productivity initiatives helped to mitigate these headwinds, with savings made across a number of areas including distribution and shrinkage.

The company said trading in the third quarter so far has seen an improved trend. In Retail, LFL sales growth has strengthened and Design & Installation is stabilising, it said.

Chief executive David Wood said: "We achieved further volume growth and record market share gains in Retail, with TradePro remaining a key differentiator. The market for Design and Installation remained tough during the half and Wickes was not immune; nonetheless, we have seen a positive response to our value-led Wickes Lifestyle Kitchen range, which is growing strongly.

"We are on track for the remainder of the year and have been encouraged by trading at the start of the second half. Looking further ahead, our outstanding customer offer, proven growth levers and focus on cost control leave us well-placed within a home improvement market which continues to offer significant opportunities."