Shares in Wickes (WIX) jumped 3% to 221.5p after the home improvement retailer posted forecast-beating FY25 profits and announced a fresh £10 million buyback for FY26.
The kitchens-to-bathroom taps seller also raised its long-term store target to 300 locations from a previous ambition of 250 in a move expected to create over 2,000 new jobs.
Led by CEO David Wood, Wickes delivered a 14.4% hike in FY25 adjusted pre-tax profits to £49.9 million. That beat the company-compiled consensus of £48.2 million as operating leverage and strong productivity partially mitigated cost inflation.
Despite a tough market for big-ticket purchases, revenue rose 5.9% to the best part of £1.64 billion.
Wickes benefited from ‘strong momentum’ in its project-based Design & Installation division. The timber-to-tiles seller also enjoyed ‘continued volume-led growth’ in Retail, driven by 9% TradePro sales growth and mid-single digit growth in DIY sales.
Comfortable with consensus
While trading in the first 11 weeks of FY26 saw outdoor project demand impacted by wet weather, indoor projects sales and the Design & Installation arm continued to grow.
Accordingly, the retailer remains comfortable with FY26 consensus calling for a 15% rise in adjusted pre-tax profits to £57.6 million. Furthermore, the strong performance of new stores, and the success of Wickes recently-opened small footprint stores, has given the group confidence to increase this target to 300. It expects to open four-to-five new stores in FY26.
What did the CEO say?
Wood commented: ‘Given the strength of investment returns from our proven store refit and new store rollout strategy, we have today announced the decision to accelerate our investment for future growth. This takes our ambition to reach 300 stores nationwide – creating over 2,000 new jobs as we bring Wickes’ distinctive offer to new locations up and down the UK.’
Broker views
With a ‘buy’ rating and 329p price target on the stock, Investec said Wickes is ‘well positioned to benefit from a consumer demand recovery, when it comes. Its strategic investments are driving profit, volume and market share gains.’
Peel Hunt (PEEL:AIM) upped its target price to 275p and reiterated its bullish stance on Wickes, which it believes is ‘well placed to navigate both the current uncertain backdrop and exploit the recovery.’
Wickes’ strategy continues to deliver and management is showing confidence in winning further market share by accelerating investment in future growth. A net cash balance sheet is reassuring at a time of geopolitical risks, and should help Wickes to continue to fund dividends as well as further share buybacks.
Disclaimer: The author James Crux has a personal interest in Wickes.
Read the press release here: https://www.wickesplc.co.uk/investors/investors-overview/regulatory-news/
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