Investment:Wickes does it in style
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INTERIM figures from Wickes yesterday provided further evidence of the DIY group's rehabilitation after its accounting fiasco two years ago Profits of pounds 115m compared with a loss of pounds 147m in the first half last year And like-for-like sales growth of 51 per cent in the half and 69 per cent in current trading was impressive, given the usual litany of excuses such as the poor weather and the World Cup
But the key development yesterday was the decision to roll out its Crystal store format Wickes started testing the idea in six stores in April The concept adds softer, decorating products such as wallpaper and floor coverings to the usual fare of building-material products
Though this would appear to risk fighting on the home ground of rivals such as Homebase and B&Q, and diminishing the breadth of the range in its core "heavy" products, the figures show otherwise
Like-for-like sales in the six stores tested showed gains of 20 per cent since the re-fit Group margins rose from 303 per cent to 312 per cent
A further 30 stores will be re-modelled during next year with the whole chain completed by 2001 On top of the pounds 5m investment in the trial stores, pounds 65m will be required to develop the whole portfolio
On full-year forecasts of pounds 225m, the shares - up 23p to 2365p yesterday - trade on a forward rating of only eight A decent gamble on a recovery play and there is always the possibility of a bid
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