Wickes feels heat in DIY slowdown

Wickes has seen its profits slip as the home improvement market dips

Published: 1:51pm, 22nd February 2012
Updated: 5:11am, 23rd February 2012

A 25% slide in the size of the UK's DIY market since its pre-recession peak in 2007 has left its mark on profits at Wickes.

Owner Travis Perkins said its retail division, which includes 200 Wickes and 107 Tile Giant stores, saw profits slip by £14 million to £45 million in 2011 as consumers cut back on buying kitchens and bathrooms.

Travis said conditions remained tough but impressed investors with an overall 37% jump in profits to £297 million after strong trading at its merchants arm and following a deal to buy plumbing and heating firm BSS.

The Northampton-based group said its retail market was 25% smaller than its peak, while its trade markets have shrunk 30%.

And it warned conditions were set to deteriorate further in 2012 amid rising unemployment and the weak housing market, with its retail business set to bear the brunt of the pain.

Its retail arm saw like-for-like delivered sales fall 1.4% in 2011, while its performance worsened to a 3.1% decline in the first seven weeks of 2012.

Like-for-like sales across the group were up 6% over the year, boosted by a strong performance by its builders' merchant arm, which outperformed smaller independent stores.

Group revenues increased 52% to £4.8 billion, helped by the £558 million acquisition of the BSS business.

Shares rose 6% after it announced a 33% hike in its dividend.

Kevin Lapwood, an analyst at Seymour Pierce, said: "In 2011, Travis Perkins held up remarkably well and gained market share. We expect this to continue." He expects the group to make profits of £319 million in 2012.