Digital-first retailer Wickes today raised its full-year profit forecast thanks to strong supplier relationships that it says have helped it maintain “excellent value” in an inflationary environment, and an agile business model.
The home improvement retailer, a Leading retailer in RXUK Top500 research, says in a trading updat todaythat pre-tax profits are now likely to come in at at least £83m, and sales in the ongoing fourth quarter of the year are in line with expectations. Profit margins, it says, have been better than expected, helping the retailer to counter the effects of inflation and rising freight costs and deliver “excellent value” for customers.
‘Do it for me’ service-related sales are strengthening, while there is also a high order book that will be carried over to its next financial year, boosting first half sales. However, sales of its core DIY products are lower in comparison with a strong previous year. Last year Covid-19 lockdowns and furloughs boosted home improvement sales, benefitting DIY and trade retailers such as Wickes.
David Wood, chief executive of Wickes, says: “This has been a period of further progress for Wickes, where our focus on value, stock availability and exceptional service have underpinned our customer offer. Our forward planning and early strategic decisions have resulted in an improved profit performance, and we continue to navigate inflationary pressures and raw material constraints well. Clearly, this remains a time of uncertainty, however our differentiated business model leaves us well-placed to continue to outperform within a large and growing home improvement market.”
The retailer says that recent changes to UK government Covid-related guidance are unlikely to have a significant effect on performance in the rest of its financial year. However, it will continue to monitor the situation closely.
Wickes demerged from the Travis Perkins group earlier this year. In the first half of its financial year, it reported that two-thirds of its sales were driven by digital, while sales grew by 32.5% to £812m. First half pre-tax profits came in at £35.7m, up from a loss of £5.5m in the previous year.
