Wickes Share Discussion Threads

[medieval blacksmith] 26/7/2022 11:43

It is still going to make profits going forward. Of course you could buy cryptos which don't make profits at all - never have done, never will do.

Screw what the analysts think. What do you think?

Investing community gone mad.

[careful] 26/7/2022 10:27

Walmart in USA show that American retail is struggling.
All retail being hammered.

[essentialinvestor] 26/7/2022 10:19

As previously mentioned I thought it would be late summer in to early autumn
before the large earnings downgrades kicked in, it's happened a month before that.


Only an optimist would think this is the end of the downgrade cycle.

[medieval blacksmith] 26/7/2022 10:02

120?

You've got a very good broker. :)

[blueball] 26/7/2022 10:01

Its a bargain @120p imo.

[medieval blacksmith] 26/7/2022 09:46

I've bought a tranche this morning. I don't think one can read too much into current consumer behaviour. Too much going on. Bought for the forward yield which seems reasonably well covered.

[careful] 26/7/2022 09:22

bought a few at 137.

quite a rout today.
shorters having fun, plus worries about economy going forward.

UK in a serious situation and this time they will not be able to print their way out of it.
This winter could be grim.

I remember one big newspaper tipping these as an under the radar investment. Company could be worth £1bn they said.
Fat chance, below 40% of that value.

[elongate] 26/7/2022 09:21

Riverman.
You are right. My error. Thankyou.

[roguetraderuk] 26/7/2022 09:20

here are the net income figs. they havent been adjusted for downgrades.
2023-01-01 £439.1 M £69.696 M 6.3x
2024-01-01 £439.1 M £69.014 M 6.4x
2025-01-01 £439.1 M £72.713 M 6.0x
2026-01-01 £439.1 M £77.808 M 5.6x
2027-01-01 £439.1 M £80.531 M 5.5x

[riverman77] 26/7/2022 09:10

ElonGate - the company appears to be using adjusted PBT. This was £85m last year (the figure you mention is the Reported PBT figure). So comparing like for like, we are looking at a 10-15% drop.

[careful] 26/7/2022 08:59

Tried to buy some on hex today.

but the speed was crazy.
115 to sell 140 to buy.

so I did not trade.

[elsa7878] 26/7/2022 08:59

Interesting.

Market cap circa £330 million.
Cash £130 million.
Almost all debt is leases.
Enterprise value £200 million
PBT £77 million (mid-point). Call it £60 million post-tax.
PE a bit over 3.

I'm not a shareholder but there must be a lot of downside baked in here even if profits halved in 2023.

[elongate] 26/7/2022 08:53

I am reading that the previous forecast for this year was for PBT £83m - compared to an outcome of £65.4m last year.

[creditcrunchies] 26/7/2022 08:15

they are really good value even at 200p but this is a sector that gets smashed when people start reining in their spending. I've noticed half empty car parks at weekends for B&Q for sure which is unsusual because summer periods is one of their peak periods. I notice Kingfisher have hardly budged but if Wickes is getting hit (they're like DIY essentials) it'll be far worse for Kingfisher that have much wider offerings for discretionary spending.

[riverman77] 26/7/2022 07:57

The key point is the mew PBT guidance to 72-82m. Unhelpfully, they don't state what the current market expectations are, but I think this looks like a 10-15% downgrade, so that probably explains today's fall.

[gswredland] 26/7/2022 07:45

TU also affecting KGF shares

[spawny100] 26/7/2022 07:29

I don't think the update was that bad was it? Confused. I'd be adding more here if I had any spare cash.

[gswredland] 26/7/2022 07:11

Market not liking it!

[elongate] 26/7/2022 07:09

So far so good on trading update, but along with most anticipate a somewhat stickier time. The outlook however seems quite good, judging by the forecast PBT figure against previous. Wide spread, so £72m might well be surpassed if their readings are correct.

[spawny100] 19/7/2022 11:28

Added a few more this morning. Building a nice little holding in the mid 160's with dividends from other sources going in here for now.

[elongate] 19/7/2022 08:55

6 week old Investors Chronicle summary pending next weeks’ trading update. Leasehold debt as most are aware is future contracted and not overdue lease responsibilities - Wickes carries little or no current debt in the pre IFRS 16 sense.
Online presence is increasing beyond that mentioned, a supportive move onto eBay for example, and ‘buyable video’ marketing.


Digi-driven Wickes looks well built
Wickes is making progress online and in-store, thanks to a supportive home-owning customer base
June 9, 2022
By Christopher Akers

DIY companies enjoyed booming trade over the course of the pandemic. Consumers, stuck at home during lockdown, turned to home improvement projects in their droves as they transformed the spare room into a remote working space and spruced up the garden. It didn’t hurt the sector, of course, that hardware stores could stay open as “essential retail” during periods when much of the wider retail economy was forcibly shut.
Tip style
GROWTH
Risk rating
MEDIUM
Timescale
MEDIUM TERM
Bull points
* Digital innovation
* Resilient customer base
* Store refits bearing fruit
Bear points
* High leasehold debt
* Reversal of pandemic DIY boom
But now DIY retailer revenues are falling back as we enter a more normalised trading and demand environment. Kingfisher’s (KGF) recent figures are a case in point. The home improvement company, which operates B&Q and Screwfix, revealed in a trading update for its first quarter to 30 April that while revenue was up by over 16 per cent on a three-year basis, it had dipped 5.4 per cent on the 2021 comparative.
Watford-headquartered Wickes (WIX) is a home improvement rival to Kingfisher. The company was spun out of Travis Perkins (TPK) in April 2021 almost two years after the demerger was first announced. That split – at least as it was intended before the pandemic – was to help streamline costs, improve decision making, and allow the respective management teams to focus on their businesses. In its full-year results to 1 January, Wickes flagged that some aspects of the separation are ongoing, including a final “one off” £30mn expected hit from the uncoupling of IT infrastructure.
The company’s growth outlook is one based in digital progress, the efficient use (and expansion) of its estate, and a resilient customer base. As we jump from a pandemic into a cost of living crisis, Wickes looks well placed in the retail space to deliver growth and earnings progress over the medium term – despite its shares’ bargain valuation.
 
The nuts and bolts
Wickes is aiming for annual sales of between £2bn and £2.5bn over the long term, up from the current £1.5bn. This may take a while – consensus analyst forecasts are for revenues to hit £1.7bn in 2024 and £1.8bn in 2025 – but the sales uplift will be driven by two sources: the company’s digital proposition and progress with the store estate.
The company describes itself as a “digitally-led” business, and for good reason, given that around two-thirds of total sales are now driven by digital channels. Wickes has spent a significant amount of time improving the digital side of its operations, and this is paying off. Innovations include the TradePro phone app, through which trade members can receive discounts and other benefits, digital showrooms, and a new DIY app.
Ecommerce is buttressed by the more than 230 stores across the UK from which the company plies its trade. Most online orders are click-and-collect purchases which means that stores have a crucial role to play in driving revenue growth. Analysts at Panmure Gordon, who recently initiated coverage on Wickes' shares with a 355p target price, think Wickes could feasibly open 50 to 100 additional stores and sees “substantial growth potential”. The company has far fewer stores than peers (Kingfisher has almost 1,500 units) and is only currently aiming for 20 new store openings over the next five years.
Refitting existing stores is another growth lever. According to the company, refitted stores produce sales per square foot of £260 against £198 from older stores and sales from refitted stores outperform (on average) older stores by a quarter. The store refit programme is expected to complete within five years, as some 12 to 15 stores are upgraded each year.
Wickes’ revenue is generated from three business areas. 'Core' sales come from local trade and DIY sales, which combined accounted for 80 per cent of revenue in the 2021 financial year. The rest of the company’s top line is derived from its Do-it-for-me (DIFM) category, which is mostly composed of showroom ranges which the company will install for customers.
Local trade customers tend to be smaller builders and tradespeople, working on projects such as extensions, loft conversions, and driveways. The TradePro scheme is key for this part of the business and has been performing well. Account openings have steadily climbed over time (see chart) – including over 40,000 customers added year to date – and are expected to drive further growth. Trade customer order books are also at record levels, showing the company has healthy demand and respect from professionals.
Positive noises are also being made on the DIY (think painting, gardening, and shelving) and DIFM (think bathrooms, kitchens, and tiling) sides of the business. The new DIY app was launched in the fourth quarter of 2021, expanding Wickes’ digital offering, and conversion rates look promising. The DIFM order book, meanwhile, is at more than double pre-pandemic levels, and a new home office proposition demonstrates that the company is keeping up with the times.

[creditcrunchies] 14/7/2022 21:25

Worth seeing the footfall at Wickes this weekend I notice BnQ car park was 2/3 empty last weekend I've not seen that since the peak of the financial crisis or the first COVID lockdown

[elongate] 11/7/2022 14:03

Nothing guaranteed. Last year, one 1st June and another in July including results date.