DIY Retailer Sees Profit Drop Despite Record Sales and Membership Growth

  • Wickes reports FY pre-tax profits drop despite growing sales
  • TradePro membership grows by 18% with 112,000 new customers
  • DIY retailer’s net cash position decreases to £99.5m from £123.4m in 2021
  • Wickes introduces 30-minute click and collect, Klarna payment options, and launches Wicked eBay store
  • Core sales moderately behind last year’s period but trade sales in growth
  • CEO David Wood remains confident in the company’s strategy and offer for customers

Wickes has reported a decline in pre-tax profits to £40.3m after accounting for non-recurring costs of £35.1m, despite a 3.5% increase in like-for-like sales for the year ending December 2022. The DIY retailer’s net cash position stood at £99.5m compared to £123.4m in the same period of 2021 due to £24.4m IT separation costs. However, Wickes maintains that its adjusted profit before tax of £75.4m is still in line with guidance, following a record £85m in 2021. In 2022, the group saw its TradePro membership grow by 18% to reach 746,000 customers and increased TradePro sales by 19%. The company also introduced 30-minute click and collect, Klarna payment options, and launched the Wicked eBay store. During the first 11 weeks of 2023, trading was in line with expectations as core sales were moderately behind the same period last year but trade sales continued to grow and DIY sales normalized. CEO David Wood stated: ‘This was a period in which we achieved record sales and made further market share gains. While profit declined, the outcome is still significantly ahead of the pre-Covid period. Our performance was underpinned by our balanced business model, digital leadership, and ability to offer the best value and service across trade, DIFM, and DIY. Like all businesses, we remain watchful of the external consumer environment. However, we have the right strategy and a compelling offer for customers, and look to the future with confidence.’

Factuality Level: 8
Factuality Justification: The article provides accurate information about Wickes’ financial performance, including profits, sales growth, and membership numbers. It also includes quotes from the CEO that provide context and perspective on the company’s performance. However, it could be improved by providing more details on the non-recurring costs and the impact of IT separation costs.
Noise Level: 3
Noise Justification: The article provides relevant information about Wickes’ financial performance and its growth in digital membership and sales. It also includes comments from the CEO on their strategy and outlook for the future. However, it lacks a deep analysis or exploration of long-term trends or consequences of decisions.
Financial Relevance: Yes
Financial Markets Impacted: Wickes’ financial performance impacts its stock value and may affect investors’ decisions.
Financial Rating Justification: The article discusses Wickes’ financial results, including pre-tax profits, net cash position, and sales growth. This information is relevant to investors and can impact the company’s stock value in the financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the text.

Reported publicly: www.retailsector.co.uk