Wickes profits drop amid weaker demand for larger ticket items

In the year to 28 December 2024, adjusted pre-tax profit fell to £43.6m from £52m a year earlier, while the adjusted operating profit margin fell to 4.4% from 4.7% in 2023.

This reflected an environment of weaker consumer demand for larger ticket items combined with the impact of pressure on operating costs due to wage inflation and other general inflationary factors, Wickes said.

These increases were partly mitigated by a strong retail performance and planned productivity initiatives.

Group statutory revenue dipped 1% to £1.5bn, with retail revenue up 1.9% but design and installation revenue down 10.5% amid "challenging" market conditions.

Wickes said trading in the first 11 weeks of 2025 has been in line with its expectations, with positive like-for-like sales growth continuing in the retail segment. In the design and installation segment, the company said that while delivered revenue growth remains negative, ordered sales are in positive growth for the second quarter in a row.

"The actions we have taken across the business to invest in our growth levers and productivity position us well for 2025, notwithstanding the uncertain market outlook for larger ticket purchases and the continued cost headwinds," Wickes said. "We remain comfortable with current consensus expectations for adjusted profit before tax for 2025."

Chief executive David Wood said: "2024 was a year of strong progress for Wickes as our balanced business model and brand strength saw us continue to deliver for customers and take further market share.

"We grew volumes and share throughout the year in retail as customers bought more of our products for their home improvement projects, however big or small. In design and installation, we have been encouraged by a return to growth in ordered sales in Q4 following the actions we took to enhance our customer offer and experience.

"Given the strong progress over the last twelve months and the good start to Q1, we are well on track for the coming year."

Wickes said the £25m share buyback programme that started in 2023 was completed in September 2024. It announced a new share buyback programme of £20m, starting in April.

At 1418 GMT, the shares were up 7% at 183.60p.

Russ Mould, investment director at AJ Bell, said: "Wickes is proving to be more resilient than many people thought. It’s holding up well in the face of difficult market conditions, with signs that recent progress wasn’t a one-off. Design and installation orders have seen positive growth for two quarters in a row, which is encouraging given how big-ticket spending has been volatile in an environment where consumers are watching every penny.

"Upbeat results from DFS earlier this month implied that big-ticket spending hasn’t completely evaporated and Wickes’ results echo this sentiment. A new kitchen or bathroom is not a decision made on a whim so recent momentum in this area is a major win for Wickes.

"The other big step forward for Wickes is its TradePro membership scheme which is acting like a magnet for local traders. Wickes is a value player and price is important in the current economic environment. Consumers are looking to keep project costs low which means their tradesmen will be looking for suppliers who won’t charge an arm and a leg.

"Wickes has made things as easy as possible for both consumers and tradesmen to find what they need. It might seem like common sense, but many businesses overlook the obvious."