Wickes Share Discussion Threads

[philanderer] 18/8/2022 09:17

And it was all looking so promising yesterday lunchtime. Then those Target numbers were released.

[creditcrunchies] 17/8/2022 11:12

I'd say the current footfall at Wickes is about the same pre pandemic from what I've seen. Products peeps are buying look like essential maintenance projects. The surge of pandemic DIY has eased off for sure.

[elongate] 13/8/2022 09:15

Wix has already published it’s trading update ahead of results on 16th. September, with KGF results to follow on 20th. September. The UBS note, in line with Societe Generale, precedes any KGF trading update that may normally be expected.

[philanderer] 12/8/2022 19:44

Sell Kingfisher and DFS due to consumer squeeze, says UBS, Dunelm also downgraded

2022-08-12 12:07:00

Shares in Kingfisher PLC, Dunelm Group PLC (LSE:DNLM) and DFS Furniture PLC (LSE:DFS) fell on Friday morning after being downgraded by UBS over the gloomy economic backdrop for the coming 12 months.

Kingfisher shares dropped 2.2% to 250.30p as the Swiss bank cut its rating to 'sell' from 'hold' and cut its price target for Kingfisher to 203p from 338p.

For Kingfisher, the broker said the downgrade reflected weak industry data and comments from peer groups in the sector, such as Wickes.

UBS said it expects competition to intensify in an already tough market and it sees Screwfix underperforming Toolstation in the medium term adding its analysis suggests a 71% downside to base case EPS.

“Whilst we like Kingfisher's turnaround potential, against the current backdrop, we think the downside potential will be a drag on valuation, given no catalysts for a re-rating in the next 12 months” UBS concluded.

UBS cut pre-tax profit forecasts for 2022 to £719mln from £760mln and for 2023 to £516mln from £783mln.

Proactiveinvestors.co.uk

[elongate] 12/8/2022 11:40

I see Kingfisher has been cut to ‘sell’ today by UBS. I do not know the reasoning, other than it must take decreasing disposable income into account.
Kingfisher ( B and Q ) is the obvious competitor.
That is why I take my own view that share of available market, and operating cost, will be important.
Kingfisher is playing catch-up to some extent, aiming to reduce the size of its stores.Wix already operates a more compact format whilst it’s accellerating £1m per store refits have generated sales per square foot of £260 versus £198 for heritage stores.
The proof will be in eating the pudding, and I do not seek to forecast that, but on its more cost-effective model in a downturn, smaller stores, curated range concentrating on the ‘must have’ side for trade and DIY, stock turnaround generally equating with payment dates leading to faster cash generation, and so on, I think Wix may find itself relatively well-placed.

[creditcrunchies] 12/8/2022 11:08

The beauty of companies like this is you can see for yourself by keeping an eye out of the footfall. So far I haven't seen a drop at my local Wickes but I have seen it at BnQ. There's different types of DIY which analysts struggle with you got essentials and nice to have.

[elongate] 11/8/2022 13:45

You are obviously expecting very significant further degrading to see profitability ‘wiped out’, or ‘neutralised’ as you previously put it, and therefore certainly well beyond the £72m+ PBT (after lease payments, staff, and other outgoings ) Wix aspire to currently. It is an opinion. I respect that at least.

[nickrl] 11/8/2022 12:43

Of course DIY is about to fall off a cliff but Wickes shells out 70m a year on leases then there's cost of staff and running the stores to cover so it won't take much to see its profitability wiped out is the issue that confronts WIX and the share price is a reflection of that risk.

[jonathb] 11/8/2022 10:08

This "death-by-DIY-disappears" is overdone, and anyway WIX does a big biz to the trade as well as DIY. Every possible misery from now til kingdom come is already priced in.

[creditcrunchies] 10/8/2022 08:55

Maybe I look at these companies through my eyes where I've done a phenomenal amount of DIY to a high standard. Even when times were tough bringing up a family I completely transformed a dog of house into a mini palace. So places like Wickes, Screwfix etc I spent a lot of money. Most of it was essential stuff. The next house it's the same process all over again so I'll be spending a lot to do that one up. It's allowed me to maximise asset value to buy bigger houses.

[ccnp] 10/8/2022 07:06

in due course, people will come to realise that the banking system has won again through a simple but effective change in the criteria of loan 'affordability'.

old timers know it meant 'afford to repay the loan'

todays bankers define it as 'maximise monthly repayments of interest with no reduction in capital'.

Repaying a loan is to be avoided at all costs.

[philanderer] 09/8/2022 20:18

Still holding 130p anyway.


Commuting in, DIY out: UK’s new ‘new normal’ after end of Covid controls

Britain’s love for green fingers and blackened thumbs during the first Covid lockdown has since evaporated as people again find a “new normal” after the ending of restrictions, a survey suggests.

The amount of time people spent gardening and doing DIY soared in March and April 2020, with people spending 40 minutes a day improving their homes and gardens compared with just 15 minutes in 2014-15. But it plummeted back to 20 minutes a day in March 2022, Office for National Statistics data shows.

full article:

[elongate] 09/8/2022 14:51

You two are obviously feeling the pinch, or likely to do so.

[pete160] 09/8/2022 14:49

Careful. One way to lift the mood of the population might be to suggest newspapers print news, rather than doom, gloom, speculation and downright lies.If, rather than boycotting paying their gas bill, people boycotted social media and buying newspapers, they would likely feel a lot better overnight. It's silly season at the moment in the media but anyone remember a positive story, already the jubilee and euro win have been forgotten.

[elongate] 09/8/2022 14:47

There will be blood on the streets. And no more avocados for me.

[nickrl] 09/8/2022 14:38

@careful i have past experience of the 80's negative equity selling at a loss but my mortgage rate was 15.5% at the time. The problem this time is even a 0.25% hike can have a sizeable impact on repayments with sums lent so large on such low rates which is why BoE, certainly under the uselss governor that's in teh chair now, won't push them to breaking point. In the short term most of the West is in a mess so i don't see a currency crisis but depending which idiot gets into No.10 it could certainly deteriorate.

Seeing as the Russians have all but switched off Nordstream 1 wouldn't hold out much chance that 2 will ever provide Europe with gas unless some moderate gets into the Kremlin.

[careful] 09/8/2022 14:27

Everyone so gloomy about the UK economy.

The worst case scenario this winter is bad and we could witness social unrest and protest that exceeds the Brexit spat, the poll tax riots and the miners strikes.

Everyone thinks that the government can pull or push a few economic levers and fix things.

The poster above suggests that a house price collapse could be avoided by the BOE keeping interest rates low.
Typical, taking no account of past experience.

If the £ collapses and inflation really takes off, BOE will have no choice, interest rates will rise, house prices will fall.
protests will make no difference.

We and the EU shall have to eat humble pie and take Russian gas through Nordstream 2.
Already some serious politicians in Germany are proposing a deal.
Domestic anger and suffering at home is secondary to supporting Ukraine.

The winter will be interesting, WIX can expect a bumpy ride.

[elongate] 09/8/2022 14:09

That seems a relatively positive statement you make there, vis a vis companies generally. With disposable income at a premium in some quarters, I like to think that a priority for most would be adding value to the home, or doing things that must be done, rather than ‘wasting’; what one has. And it has been reported that Wix customers tend to be more affluent than those of KGF.
The last dividend was an enhanced payout ratio of 40% - I very much doubt that can be maintained.
The shorters certainly prefer KGF. As far as I am aware, there is no published short interest in Wix, is there?

[nickrl] 09/8/2022 12:51

KGF now most shorted stock on FTSE will continue to keep a lid on share price here until we have much better clarity where things are headed which is recession how deep how long not yet clear. Also you can't ignore the fact that higher energy prices are now locked in for several years and under the cover of this renewables will be ramped up as they now cost effective with current gas prices so teh era of cheap energy is over and that will eat into peoples disposable income for several years before incomes fully neutralise it if they ever will. That said unless house prices do a 1980s collapse, very unlikely as it will take the banking system with it so BoE won't ratchet rates up much more imv, people will want to protect the wealth of their houses so that means maintenance and DIY improvements will still have a part to play. So if WIX can keep a lid on costs, especially the leasehold estate, they should remain profitable but doubt current dividend will be sustainable for much longer.

[ccnp] 09/8/2022 07:21

It would work if they actively support that market. So in the case of Wickes, they should have asked themselves how many trannies hammer a nail in. And how many of natures nail hammerers aspire to be a trannies.

The venn diagram, I humbly suggest will look like 2 breast. Circular with a noticeable air gap between them.

(Interesting fact 2. Trannies autocorrects to transient. Well who would have thought that)

[rock star] 09/8/2022 06:27

Public companies in my opinion (others will disagree)should stay out of the whole identity politics side of things. No upside from my point of view.

[philanderer] 08/8/2022 08:53

So far so good......just about.