WICKES GROUP PLC: Q4 Trading Update

20 January 2022

Wickes Group plc - Q4 Trading Update

Continued strong performance on a two-year basis, profit guidance maintained

Wickes Group plc ("Wickes" or "the Group") today provides a fourth quarter trading update for the 13 weeks to 25 December 2021, and reaffirms profit guidance for FY2021.

Wickes continued to perform well in the fourth quarter, with a resilient sales performance. As expected, Core sales moderated as we annualised the toughest comparatives from 2020, while remaining strongly ahead on a two-year basis. We continue to expect to report adjusted PBT* of no less than £83m.

Notes: FY21 total sales growth will comprise the 53 weeks to 1 January 2022. LFL figures are based on the comparative 52 weeks to 25 December (FY20 was 52 weeks to 26 December). DIFM represents delivered sales.

Core sales in Q4 were supported by continued strong performance in local trade, where home renovations continue to drive robust order books for our trade customers. TradePro membership and associated revenue continue to grow strongly, driven by our digital capability. We launched our DIY app successfully in November, with strong conversion rates.

DIFM delivered sales** were strong in October and November, as we progressed through the elevated order book, but weakened in December from a higher incidence of Covid disruption and self-isolation ahead of the holiday period. As a result, the DIFM year-end order book has more than doubled on a two year basis. This, plus an encouraging lead and order profile from the winter sale, will support DIFM sales in the current year.

As previously guided, the year end cash position has moderated from the half year, impacted by the second half weighting of capex and IT separation costs, and dividend payments. As expected, inventory levels have also increased as a result of cost price inflation, and the recovery of stock levels from the prior year. Given our strong balance sheet, we have moved further on inventory rebuild in order to protect the business against the risk of any future supply chain disruption.

Refitted stores continue to perform very well, with a strong returns profile as we work through the estate and we therefore plan to accelerate the pace of major store refits from 2022 onwards. We will provide further detail on our investment and broader capital structure as part of full year reporting.

David Wood, CEO of Wickes commented: "Wickes has performed very well during 2021, testament to the appeal of our customer offer and our ongoing focus on price leadership. While we are mindful of the external environment, we look to the future with confidence. We believe that our service-led and digitally-enabled proposition leaves us well placed within a highly attractive home improvement market. I would like to thank all of my colleagues for their hard work and support as we continue to help the nation feel house proud."
 

 * Adjusted PBT represents profit before tax on an IFRS basis and excludes adjusting items which will comprise demerger costs and IT separation costs for 2021. ** Delivered sales are based on project completion, which triggers revenue recognition in the accounts. Ordered sales are sales at point of order rather than completion.

About Wickes

Wickes is a digitally-led, service-enabled home improvement retailer, delivering choice, convenience, value and best-in-class service to customers across the United Kingdom, making it well placed to outperform its growing markets. In response to gradual structural shifts in its markets over recent years, Wickes has a balanced business focusing on three key customer journeys - Local Trade, DIY (together "Core") and Do It For Me ("DIFM").

Wickes operates from its network of 232 right-sized stores, which support nationwide fulfilment from convenient locations throughout the United Kingdom, and through its digital channels including its website, TradePro mobile app for trade members and Wickes DIY app. These digital channels allow customers to research and order an extended range of Wickes products and services, and arrange virtual and in-person design consultations.