Wickes Starts The Year With Strong Retail Revenue Growth

• Strong start to 2025 with acceleration in Retail performance and continued growth in D&I ordered sales
• Comfortable with market forecasts for 2025 adjusted PBT 

The start of 2025 has seen good growth momentum across the business. In the first 17 weeks of 2025 overall Group revenue increased in the period by 6.9% year on year.  Wickes delivered strong volume-led sales growth in Retail¹ with revenue up 9.6%.  In Design & Installation, another quarter of ordered sales growth plus the contribution from Solar Fast have resulted in Design & Installation delivered revenue improving to broadly flat year-on-year.  

Retail sales delivered strong growth in the period, demonstrating the continued success of Wickes' great value and service-led proposition.  We increased market share further, with particularly strong performance in building, garden and decorating categories.  This sales performance was again driven by volume growth, with deflation close to zero in the period.    

Within Retail, TradePro continues to perform strongly, with sales up 13% year-on-year, as local trade professionals continue to choose Wickes to save them time and money.  Active TradePro members⁴ have increased by 14% year-on-year to 605,000.  DIY sales were also in year-on-year growth, driven by volume, as a result of an increase in customer transactions.

We have been well positioned to benefit from the warmer weather at the start of this year, which has supported the strong sales performance in Retail.  For example, in the week of the early May bank holiday we had our biggest ever week for sales of compost and top soil. 

The positive momentum within Design & Installation sales has continued.  We have achieved another consecutive quarter of year-on-year growth in ordered sales⁵, following a number of actions taken during 2024 to improve our customer offer and experience.  As expected, delivered sales⁶ (which lag ordered sales by a few months) were broadly flat in the first 17 weeks of 2025. 

Investment in our strategic growth levers continues, with work underway to convert four former Homebase stores as part of our plan to open 5-7 new stores in 2025.  We have refitted three further stores in the period and c.80% of the store estate is in the new format.  In 2025 we will step up the level of investment in technology to enhance the customer experience further and to support productivity initiatives, positioning us for profitable growth in the next few years. 

The actions we have taken to invest in our growth levers and productivity programme have set us up well for a successful 2025.  Whilst the consumer outlook remains uncertain and the business faces significant cost headwinds, we have made a good start to the year and remain comfortable with current consensus expectations⁷ for adjusted PBT in 2025.

We expect to report H1 trading in late July.

David Wood, Chief Executive of Wickes, commented:

"This has been a strong start to the new financial year, with the further increase in sales driven exclusively by volume growth, as more customers shop with us.

"Within Retail, we have gone from strength to strength. We have taken further market share and seen a very good market outperformance in timber, hardware, decor and garden.

"In Design & Installation, we are benefitting from the actions taken to enhance the Wickes offer. This is a segment demonstrating real momentum, with a second quarter in a row of ordered sales growth. 

"While we continue to be mindful of consumer sentiment and a challenging external environment, we have a strong platform in place and we are well set to continue delivering against our strategy."

Excerpts from Analyst Notes: 

Investec

Wickes has had a strong start to FY25 driven by volume growth and market share gains. Much is driven by management actions as it has continued to invest in its strategic pillars in recent years. Outstanding TradePro growth continued, with DIY back in growth and D&I exiting in growth. No change to guidance or INVe forecasts, though we see upside risk to our forecasts given momentum, with potential to double PBT when demand picks up. BUY.

 Strong start to FY25 with an acceleration in growth. In the first 17 weeks to 26th April, Group revenues grew by 6.9% (2H25 +1.8%). Retail sales increased by 9.6% (2H24 +2.3%) with LFL +9.2%. This was all volume-driven with deflation close to zero. Much of the growth was down to ongoing management actions, though weather has undoubtedly helped in more recent weeks. Another outstanding TradePro performance, with sales up 13% YoY and members +14% to 605k. DIY sales return to growth YoY for the first time since 2H21. Design & installation (D&I) revenues were down 0.4% with the first-time contribution of Solar Fast almost offsetting the LFL decline of 4.2%. More importantly, D&I saw its second quarter of order growth; D&I revenues should return to growth in 2Q25, having exited the period in positive territory.

 Management reiterates FY25 guidance and remains comfortable with company-compiled consensus for FY25 adj. PBT of £47.7m. It is early in the year and the consumer outlook remains uncertain. Wickes, like others, faces material cost headwinds from NI & NLW increases in April. It has also stepped up its investment in technology YoY to support its online future growth.

 Potential to double profits. As discussed in our note, Recovery in sight (published 1/4/25), operational gearing works both ways. Looking at the cumulative 3-year profit bridge picture from a PBT peak of £85m in FY21 to FY24, the impact of lower sales on profit over the period suggests a recovery profit potential of least £45m when demand picks up.

 Undemanding valuation (CY26E PE 11.7x, dividend yield 5.5%) with earnings recovery potential when markets improve not reflected in either consensus PBT or the valuation. Of the £20m share buyback started in March, £4m has been completed YTD.

Peel Hunt

Another strong update, expectations unchanged:

• Wickes has made a strong start to the year, with revenue +7% YTD and LFL sales +5.5%.
• With pricing broadly flat, growth is being driven by volumes, as the group continues to take share.
• We are making no changes to our forecasts, and do not expect consensus to change. The shares have traded well this year, rising 31% YTD. At 197p, they trade on c.11x CY26E PE and 5.5x EV/EBITDA, with a 10% adj FCF yield. While our forecasts are unchanged at this juncture, we roll our valuation forward to Dec 2026, increase our TP to 235p, and reiterate our Buy rating.

Source : Wickes 

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