Tuesday, August 9, 2022

Wickes starts year with 7.6% LFL decline

DIY specialist Wickes has seen like-for-like (LFL) sales dip 7.6 per cent since the start of the year as poor weather conditions continued to blight trading, according to figures released today.

Overall group LFLs at parent company Travis Perkins for the first seven weeks of 2013 fell 5.1 per cent while Wickes saw LFLs slump 7.6 per cent over the period.

However, overall group sales rose 1.4 per cent to £4.8 billion in the year ended December 31st 2012, while pre-tax profit jumped 16.2 per cent to £313 million and Travis Perkins feels it has made good progress given the difficulties in the consumer sector.

A statement from the group said: “Our consumer division has significantly outperformed in 2012, with the Wickes, Tile Giant and Toolstation businesses all producing excellent results.

“The consumer division markets were the hardest hit of any that our divisions operate in, so that makes the result achieved in 2012 even more encouraging.

“A combination of careful margin management, strong overhead control and targeted investment resulted in profits rising by 40.7 per cent whilst turnover on a reported basis was up only 13.2 per cent.

“If Toolstation is excluded from the 2012 result, divisional turnover was flat year-on-year, whilst profits increased by 26.5 per cent.”

However, analyst firm Conlumino‘s Lead Consultant Joseph Robinson noted that, while Travis Perkins‘ top-line performance has been affected by its acquisition of Toolstation, the LFL decline is indicative of ongoing tough trading across the sector.

He added: “Wickes is a good retail business, with a loyal customer base buying into its strong competitive advantages, namely: low prices, differentiated own-label ranges and its customer service credentials.

“Moreover the last couple of years have seen the business make some very positive strides in new product areas – such as kitchens and bathrooms– where capacity falling out of the market has created opportunities.

“Indeed, while 2012 represented another difficult year, some solace can be taken from operating margin in the Consumer Division increasing 1.1 percentage points to 5.6 per cent, reflecting strong cost control and refocused marketing spend.

“Nonetheless, a 7.6 per cent decline in like-for-like sales during the first seven weeks of its 2013 financial period – albeit impacted by poor weather and tough comparatives – point to another tough year ahead.

“While it‘s difficult to pinpoint many fundamental issues with Wickes‘ current strategy, until core markets stabilise, its performance is likely to continue to zig-zag.”


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