Wickes hails signs of DIY recovery in ‘encouraging first half’
The DIY chain and builders’ merchant unveiled plans for a £25 million share buyback programme.
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Your support makes all the difference.Wickes has announced it will return £25 million to investors through share buybacks as it cheered signs of a recovery in under-pressure DIY sales.
The chain, which also trades as a builders’ merchant, said while still lower year-on-year, DIY sales were beginning to show an “improving trend” in its second quarter.
Wickes posted a 3% rise in like-for-like sales in the three months to the end of June, marking a turnaround after a 1.8% fall in the first quarter.
Our performance has been underpinned by further momentum in trade, as local traders continue to turn to Wickes to save them time and money
Comparable sales edged 0.7% higher overall.
DIY firms have been suffering since the pandemic boom in demand has faded.
The sector has seen profits plummet from the pandemic highs when people stuck at home were investing in their living spaces, while costs have also eaten into bottom line earnings.
But Wickes said it was launching a £25 million share buyback programme as part of a new shareholder returns policy, “which reflects confidence in the company’s strategy and business model”, helping the stock rise 5% in Tuesday morning trading.
Its update showed that core sales lifted 2.3% in the second quarter, as trade sales helped offset falling DIY revenues.
Overall demand was boosted by decorative and construction categories and as outdoor projects benefited from more normal weather patterns, according to the group.
Its Do-It-For-Me business continued to lead the way with sales up 5.3% in the quarter, albeit a slight slowdown from the 6.2% growth seen in the first three months, as bathrooms refit proved to be in demand.
The firm said inflation pressures continue to slow as expected, falling from 9% in the first quarter to 4% in the second.
Wickes added it was on track with market expectations for full-year profits of between £54.5 million and £57 million.
David Wood, chief executive of Wickes, said it had been an “encouraging first half”.
“Our performance has been underpinned by further momentum in trade, as local traders continue to turn to Wickes to save them time and money, an improving trend in DIY, and a good performance in Do-It-For-Me,” he said.