Wickes Share Discussion Threads

[creditcrunchies] 15/9/2022 07:15

That is a massive dividend I just keep on accumulating at these ridiculous lows. These are all for my SIPP

[my retirement fund] 15/9/2022 07:11

By exited I mean no need to invest. I guess long term existing shareholders may well be pleased with this? Would be interested for other views here.

[34adsaddsa] 15/9/2022 06:57

"So basically guidance for FY unchanged and we are doing a good job. Nothing to get excited about here imo."

Given the share price performance, I think that is quite exciting.

[elongate] 15/9/2022 06:33

As guided. Summed up in dividend announcement.

Dividend
The Board has declared an interim dividend of 3.6p, which will be paid on 4 November 2022 to shareholders on the register at the close of business on 30 September 2022.

The shares will be quoted ex-dividend on 29 September 2022. Shareholders in the UK may elect to reinvest their dividend in the Dividend Reinvestment Plan (DRIP). The last date for receipt of DRIP elections and revocations will be 14 October 2022.

We recognise the importance of cash returns to our shareholders, and, at our FY 2021 results, we announced an enhanced payout ratio of 40% of adjusted profit after tax, with approximately one third to typically be paid as an interim dividend. While there are well-documented headwinds for the sector to navigate, given the cash generative nature of our business and the strength of our balance sheet, and on the basis that adjusted profit before tax falls within the current guidance range, we intend to maintain the full year dividend per share at last year’s level.

In the current year the payout ratio will thus rise above 40%, but over time we would look to return to this level.

[mjneish] 15/9/2022 06:31

Quote:

"Interim dividend declared of 3.6p (H1 2021 2.1p), reflecting our intention to maintain the same full year cash dividend as FY 2021."

The total dividend in FY 2021 was 10.9p, for a current yield of 9.4%.

[my retirement fund] 15/9/2022 06:07

So basically guidance for FY unchanged and we are doing a good job. Nothing to get excited about here imo.

[nickrl] 14/9/2022 19:56

Financials will be reasonable but it what they say about the here and now and months ahead that will define whether we move up from here.

[creditcrunchies] 14/9/2022 17:44

Be good to see a breakdown of the sales to see how much revenue is made up of kitchens and bathrooms. That's the only area of concern on sales. Also they need to be careful expanding new stores when the economy is going into recession. Other than that core DIY doesn't worry me too much as long as they maintain decent margins.

[philanderer] 14/9/2022 17:23

The Company website says interims tomorrow. Gawd help us.

[rightnellie] 12/9/2022 14:17

Let's hope so - bought some today.

[s34icknote] 12/9/2022 11:39

This could follow rch ? Luce ? And Victoria ?

[essentialinvestor] 09/9/2022 18:18

CC, KGF update shortly, should give a good insight in to the UK market.

[creditcrunchies] 09/9/2022 18:14

I'm not sure how they predict the future the Wickes around here used to be pretty quiet from 2017 up to 2020. Eversince COVID it's been ridiculously busy, last Sunday it was busy still. No sign of anybody cutting back. The only area it might do is the online kitchen design orders. Larger spends might get put on hold. Saying that they probably use contractors anyway if there's no work they don't have to pay contractors. So margins would be the same with a slight hit on turnover.

[nickrl] 09/9/2022 09:37

Leases and operating costs are largely fixed although they can flex staffing levels but they are in beneficial position of no debt either accruing interest or needing refinancing which is a positive for them. With the short term pressure taken off energy bills WIX are in better shape. Next weeks interims will be positive because of the backlog of spending they will have benefited from but its what they say about the future that will set the tone for share price but i reckon we will get a 15-20% upside from here.

[elongate] 09/9/2022 08:49

Yes. As posted, almost ad infinitum, for all companies who pay rent under forward contracts. The discussion on Wix leases is a tedious one, with an inference from some quarters Wix will have difficulty in paying/staying profitable.

[bigt20] 09/9/2022 08:31

IFRS 16 ‘Leases’ has no economic effect on Kingfisher’s business or cash flow, however it does impact the way assets, liabilities and the income statement are presented

--> which is my point

[elongate] 09/9/2022 06:38

Yes. I posted earlier on in proceedings when posters said it was carrying too much debt. It had none, effectively, in the accepted sense. No matter what Wix are contracted to pay in the future, as I just said, it is pay as you go, as payment dates fall.
Like many ‘rental’ agreements - and Wix pays it’s rent. Same as Kgf on the portion of the estate which is leased. They saw fit to explain it early on.

IFRS 16 Leases – Summary
 New accounting standard requiring the majority of leases to be recognised on the balance sheet (replacing previous standard IAS 17)
 IFRS 16 ‘Leases’ has no economic effect on Kingfisher’s business or cash flow, however it does impact the way assets, liabilities and the income statement are presented
 Kingfisher has decided to adopt the full retrospective transition approach from 1 February 2019, which also requires the restatement of comparative P&L, balance sheet and cashflow statements
 Kingfisher’s Half Year results announcement on 18 September 2019 will be the first under IFRS 16 and will include fully restated HY 2018/19 and FY 2018/19 comparatives
 Indicative FY 2018/19 restatements under IFRS 16 were disclosed at the FY 2018/19 results
 Today’s update provides the impact on certain HY 2018/19 and FY 2018/19 income statement line items, including retail profit by geography. The restated numbers are unaudited and subject to change
 Impact on FY 2018/19 income statement (non-cash) (unaudited):  Retail profit +£171m; Underlying pre-tax profit +£1m
 Lease adjusted net debt / EBITDAR under IFRS 16 at FY 2018/19 is estimated to be c. 2x (c. 2.6x under IAS 17)

[bigt20] 09/9/2022 06:11

ElonGate 7 Sep '22 - 21:30 - 344 of 345

Many are renewable between 5 and 15 years. Most 5 yearly rent reviewed.

Yes. Here it is, but whatever the figure (IFRS 16 included) for all practical purposes it has obviously been, and will be, accounted for in the profit before tax on a pay as you go basis.


--> Under the old lease standard (IAS17) leases were categorised into two groups according to certain criteria. Retail property was often an operating lease with the costs going through the Profit & Loss Account / Statement of Profit or Loss and other Comprehensive Income.


With the change of lease standard to IFRS 16, the leases are treated as assets and liabilities on the Statement of Financial Position / Balance Sheet. So the Profit & Loss sees the depreciation charge and financial charges.

[essentialinvestor] 07/9/2022 21:14

KGF mentioned achieving 20% plus discounts on new lease terms, a significant number of B&Q leases are up for renewal over the next 3-5 years. Not holding KGF atm.

[elongate] 07/9/2022 20:30

Many are renewable between 5 and 15 years. Most 5 yearly rent reviewed.

Yes. Here it is, but whatever the figure (IFRS 16 included) for all practical purposes it has obviously been, and will be, accounted for in the profit before tax on a pay as you go basis.

nickrl11 Aug '22 - 13:43 - 258 of 343
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.

ElonGate11 Aug '22 - 14:45 - 259 of 343 Edit
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] 07/9/2022 19:53

See my #258 but it was 70m/pa for leases as length of them i don't know.

[elongate] 07/9/2022 19:37

For clarity, and without speculation, this I think is the last comment ( 25th. March 2022 ) made by Wix touching on leases and on dividend.

“Wickes remains committed to retaining a strong balance sheet, and this includes an acknowledgement that we carry a significant level of leasehold debt and the need to fund seasonal working capital. Having reviewed our capital requirements over the medium term, we intend to operate with lease adjusted net debt / EBITDA of consistently less than 2.75x and to maintain cash balances to fund our working capital.
 
Alongside maintaining a strong balance sheet, we intend to invest our cash flow behind our high returning growth levers to support our continued market outperformance. We will balance that investment with an enhanced dividend payout ratio of 40% of adjusted profit after tax, with approximately one third typically paid as an interim dividend.
 
Where the business generates cash in excess of that needed to maintain a strong balance sheet, fund investment for growth and once the ordinary dividend has been met, the Board may conclude that it has surplus cash. Were this to arise, there is currently a preference to return this surplus cash to shareholders via share buybacks or special dividends.”

[philanderer] 07/9/2022 15:13

Good to see WIX going against the general retailer downtrend today.

[diku] 07/9/2022 08:36

Somebody has glued down the bid and offer price since open...machine broken?...

[elongate] 07/9/2022 06:49

There is another view espoused - nothing to do with Truss. Everyone knew something fairly large had to come. That perhaps investors are starting to feel the downgrades and sentiment has overdone the selling, and put some companies into bargain price territory.
Leases. I shall leave that to you. In detail. Every lease. Duration and terms. Etc. Please report findings. Enjoy!