Wickes Group plc

Good morning and thank you for taking the time to join us today. And I'd also like to welcome everyone who is watching via the webcast. I'm here with our CFO, Mark George, and we are delighted to share with you our results for the six months to the end of June. We'll spend the next 20 minutes or so taking you through the performance of the business and the broader market trends, as well as highlighting the great progress we are making on executing our strategic plans. I am pleased to report we delivered a resilient performance in the first half and made record market share gains in our retail business, which comprises of local trade and DIY. I'd like to take this opportunity to thank all of my 8,000 colleagues for their incredible work in delivering these results and helping the nation feel House Proud. In a challenging market, our outperformance is a clear demonstration that our uniquely balanced business model and strategic growth levers continue to deliver and position us well looking forwards. We continue to see great success with our TradePro scheme with sales up 14% and this week we're celebrating hitting our target of 1 million members. In our design and installation business, we're encouraged by the success of our lifestyle kitchens performance with sales up 19% in the half. And of course, we've added a new arm to our design and installation business. The recent acquisition of Solarfast gives us an opportunity to build market leadership in the rapidly growing home energy solutions market. And in the half, we've begun our initial rollout of Wix Solar in 50 trial stores and online. Our new store refit programme is progressing well and we're delivering returns and we've opened two new stores and undertaken three refits in the first half with more to come before the end of the year. We've returned 28.9 million to shareholders and today confirm that we've maintained our interim dividend at 3.6 pence and I'm absolutely delighted that the great work we're doing across our built to last responsible business strategy has resulted in us gaining entry into the FTSE for good index. In Q3 so far, we've been encouraged by the improved performance in both retail and design installation. We've taken planned actions to mitigate the impact of inflation, which along with our improved current trading means that our overall outlook for adjusted PBT remains unchanged. I'll now hand over to Mark to take you through the numbers in a little more detail.

Thank you, David, and good morning, everyone. As David mentioned, we've made a good start to 2024, and we've got some of the headlines here on this slide. Revenue was 800 million in the first half. Retail was in positive like-for-like, and that's been positive now in like-for-like terms for about a year, so that's really encouraging. Design and installation, delivered sales have been in decline, reflecting a tough market conditions for big ticket items. Gross margin was a little higher, 24 basis points higher year on year, with really careful management of pricing and promotions. And this stable gross margin, along with tight cost management, has helped us support our profit levels. We've delivered adjusted profit before tax of 23.4 million in the half. we continue to operate with a strong balance sheet. And we ended the half with 152 million of cash. And this enables us to deliver good returns to shareholders. So in line with our capital allocation policy, we're maintaining the interim dividend at 3.6 pence. And we're continuing with the share buyback, which is now nearing completion. So just turning to the P&L. Trading conditions in 2024 so far have been rather similar to 2023. There's been no inflation in our top line. In fact, actually, there's been deflation, which we'll come on to in a moment. But there's still been a lot of inflation in our cost base. So in light of this, the profitability in the first half of 2024 has been resilient. Revenue on a like for like basis in total was down 3.9%. The slightly higher gross margin meant that margin in pound notes terms were down only 2.7%. Operating costs have been tightly managed. And despite the inflation in energy and in wages, overall, we spent the same amount on operating costs this half as we did the same half in 2023. So the fall in profit before tax year on year was driven purely from the flow through of lower sales. And that, in turn, has come purely from the reduction in sales of design and installation. So let's break that down a little bit more into detail. So you can see here, retail and design and installation sales in the half. First of all, retail, a good sustained period of positive volume growth now. So record market share demonstrating that our model is working. The positive light for light that we're seeing is driven by volume. You can see in the table there, the first half we had deflation of around 3% and volume growth of just more than that, and hence the 0.6% growth in light for light. Also worth noting the Easter effect. So it reduced our Q2 numbers by about 1.4%. If you took that phasing out, we'd have been in growth for both Q1 and Q2. And the real driver behind our retail success in the first half has been TradePro. You can see there an 18% growth in the number of active TradePro members shopping with us, 14% growth in TradePro sales. So really very strong performance again from TradePro. Now the design and installation side of our business, it has been tougher. The market environment for bigger ticket projects has been soft, as you all know. So just to work through the numbers a little bit, our delivered sales, in addition to ordered sales being slightly lower in the first half year on year, high single digit decline in ordered sales, we were also lapping a period of strong delivered sales in H1 last year, where we were working through the elevated order book that we had. in that post-COVID period. So the two things coming together has resulted in the big decline there that you can see in delivered sales. But as David mentioned, on the value end of our range, we're doing very well. So Wicks Lifestyle Kitchens up 19%. And as you know, some of the sales go into design and installation if they've had a design component from one of our design consultants. And the remainder of the sales will go into retail. So this profit bridge shows the sale shape coming through really clearly. Now, in this bridge, we take distribution costs out of gross margin, which for statutory reasons are in gross margin. But here, we show them as a cost. So the margin that we see here is the pure trading margin. And you can see that we've increased the trading margin in retail. We've had a slight increase in sales and a slight improvement in gross margin rate, and hence the improvement in retail margin. The decline in design and installation sales inevitably drops through to a decline in trading margin. And you can see that here. In addition, we've got higher consumer credit costs year on year with the introduction of more interest-free credit options for our customers. But on costs, we're delivering productivity plans in line with our expectations really well, and they're offsetting the cost inflation. These are initiatives in distribution, in store productivity, and lower stock loss and shrinkage through the stores. So some really great initiatives from across the business. We continue to invest in technology and customer service, and this will be good for customers, but also good for operating costs in the future. And then the other bucket here is a combination of lower property programme costs and colleague bonus. So the adjusted profit number of 23.4 million is a good result in light of the inflation and significant pressure on the design and installation business that we've been seeing. Turning now to the balance sheet. So we continue to operate with a strong balance sheet and we ended the half with 152 million pounds of cash So the starting point for that, of course, is the strong profit number, which is always the basis for positive cash flow. We then have the usual at-back for depreciation, and then the significant inflow for working capital of 65 million. Now, you'll recall that we have a seasonal shape, which always means we have positive inflows in the first half, and they unwind in the second half. And that will happen again in the second half of 24. We've got capex of 12 million in the first half, and that's broadly in line with our outlook for 30 million for the year as a whole. And you can see the solar fast acquisition of 5.1 million in there as well. But the strong balance sheet that I described has enabled us to deliver good returns to shareholders. And you can see a combination there of the dividend, the final year dividend from last year, which was paid in H1, plus the buyback. We've delivered 29 million of cash back to shareholders. So I'll end with some comments on outlook and guidance. So far in Q3, trading has been on an improved trend. And David will say a little bit more about that in a moment. we're continuing to outperform the market and the most recent market share data shows a very strong performance by Wix. So current trading plus the productivity plans that we have underpin our outlook on profit for the year and we remain comfortable with market consensus for PBT for FY24. Now, I've also provided some technical guidance there for you. I'm not going to take you through it because it's completely unchanged from the start of the year. So to summarise, to wrap up, the business is continuing to perform well. Even in a tough environment, we're performing well, resilient profit, and really importantly, growing market share. The retail side of the business continues to perform well. It's been more challenging in design and installation, but that is now stabilising as well. Good cost management has minimised the drop in profit year on year and will stand us in very good stead to grow profit as the wider economic environment improves. With that, I'll hand back to David.

DAVID ROTHERY- Thank you, Mark.

Next slide, please, team.

This slide will be familiar to you. It outlines the strong portfolio of growth levers that we have to win in the market and to achieve our very simple purpose, which is to help the nation feel house proud. I'll take a few minutes to share how investment in our growth levers is delivering results. But before I do that, I thought it'd be helpful to look at some key trends in the market as we put our strategy into action. Overall, we can see market trends heading in the right direction, albeit the external environment does remain uncertain. It is against this that we believe Wix and its differentiated business model is well placed to continue to gain market share. As you'll be aware, we conduct regular customer research surveys to ensure we always have our finger on the pulse of what home improvers want. Firstly, from the perspective of local trade, they are telling us that their pipelines of work remain healthy. Around 50% of them have work lined up for over three months, and a quarter have work lined up for over a year. Understandably though, they continue to be cautious about costs, with 28% telling us they are being mindful about the materials they buy, and they're shopping with us for the great value that we offer. Turning to those customers who are in the market for a new kitchen or bathroom, we're seeing that planned spend on these big ticket items has stabilised in recent months, although it remains below historical norms. There is definitely stronger demand for more affordable projects, which of course our Wicks Lifestyle Kitchens range plays into, and means we are well placed to benefit from this trend. And with consumers looking for ways to make the cost of running a home more affordable, 15% of home improvers have considered installing solar panels over the last year. DIYers continue to focus on doing smaller projects such as painting, decorating, a bit of garden maintenance that just costs a little bit less. What is notable is that those product categories linked to larger projects are more challenged, the impact of which is being seen across the market with the recent administration of carpetwright and CTD tiles. However, we continue to outperform and take share as the market consolidates. We can clearly see how these market trends translate into our business performance and why our balanced model that spans all three customer propositions is so well placed to benefit from and mitigate changing consumer trends. So looking at retail first, we continue to outperform the market. As you can see from this chart on the top right of the slide, we've seen record share gains in the first half, building on five years of consecutive growth. These gains have been particularly strong in the key categories of decor, garden, tiles and flooring. Trade continues to be a crucial growth driver for our retail business. As I said before, these are our most strategically valuable customers, spending on average 10 times more in a year than a typical DIY customer. We are successfully developing this customer base with our TradePro scheme having a great first half, sales up 14%, and of course we're delighted to have announced that we've hit our target of 1 million total members, a real milestone in the TradePro success story. As we explained at our Capital Markets event earlier this summer, we're now focused on growing the number of active customers. You can see from the chart on the bottom right that this cohort has been growing steadily and now stands at over half a million, which is an increase of 116% on 2018. At Wix, we pride ourselves on always having the best availability and best price on the lines that matter most to our customers. Our strategy is to have a highly curated range of around 9,000 SKUs in store, supplemented by additional products online, and we're always striving to adapt and innovate our product offering to meet the demands of today's consumers. With that in mind, we carry out a regular drumbeat of range reviews, and in the first half we undertook 10 reviews with strategic emphasis on introducing new and innovative products in our core categories, such as acoustic wall panels, new garden trellis and pergola products, with the customer journey improved by new in-store graphics and packaging. And finally, on this slide, as I alluded to earlier, we've seen an improvement in current trading in our retail business, with strengthening like-for-like sales so far in Q3. With the backdrop of a softer market for larger ticket purchases, this has inevitably impacted sales of our bespoke kitchen ranges. However, our focus on developing a value-led ready-to-fit kitchen proposition with the relaunch of Wicks Lifestyle Kitchens is proving highly complementary to our bespoke ranges. Wicks Lifestyle Kitchens are very popular with customers, sales up 19% in the half. Customers love that they can get a beautiful kitchen designed by one of our fantastic design consultants for under £3,000 and that an increasing proportion of customers are choosing to use this service. And these lifestyle kitchen sales have been instrumental in holding our total ordered sales of all kitchens, bathrooms and associated installations at actually just minus 4% compared to half one 2023. For our showroom bespoke kitchen and bathroom ranges, we have taken a number of steps to simplify the customer journey by rebalancing the number of touch points along the way and introducing new technology and services. Important components include field service management tools for our installer teams, a new online booking system that gives customers direct digital access to their design consultant's diary, and a new customer experience centre where a dedicated project manager is assigned to every customer. These enhancements have resulted in a better customer experience and reduced operating costs. We continue to see high participation of customers choosing to use the Wix installation service to undertake their home improvement projects, with more than one in two projects now using our installers. And encouragingly so far in Q3, we are seeing a stabilisation of performance in design and installation trading. Staying within our design installation business, I'll now turn to the new kid on the block, Wix Solar. Solar is an exciting market in long-term growth, forecast to be worth 1.5 billion in the UK by 2028. We see a great opportunity to be a trusted brand in what is currently a highly fragmented market. And with decades of experience providing design installation services at scale, we are well-placed to enter in a meaningful way and build a position of leadership. Our acquisition of a majority stake in Solarfast completed at the end of May. And in recent weeks, we've launched point of sale assets in 50 trial stores and the customer digital journey is now live on the Wix website. Whilst it's still very early days, we've been encouraged with the response so far, both in terms of leads and conversion. The initial indications are that this is a really good fit for our brand. We're seeing good levels of engagement from customers who are clearly happy to buy their solar installation from Wix. It's been a busy first half for our property team. They've refitted three stores into the new format and opened two brand new stores in Long Eaton and Durham, creating some 60 new jobs. We continue to see a good return on capital, around 25% on our refitted stores and 179 stores are now in the new format. And as you can see here on the slide, just what a difference our refit programme makes to a store. We're on track to deliver our 2024 plans with four more stores to be refitted in the second half, along with two new openings, including Aberdeen, which opened just two weeks ago. And we're supporting the energy efficiency of our new stores by adding solar where we can. For example, in our new Aberdeen store, it's got solar panels and our own Solarfast team actually installed those. Our built to last strategy is going from strength to strength as recognised by our entry into the FTSE for good index. Across the three pillars of the strategy we delivered some great results in the first half and I'll just highlight a couple of them. With the newly appointed government very much focused on flexible working, we're pleased to be ahead of the curve and have already rolled out flexible working opportunities to all store management teams and support centre roles. We're also on the Scope 3 Taskforce of Edra Gym, which is the global trade body for the home improvement industry, and we're among the first signatories to its global Scope 3 commitment. And it's an honour to have our efforts recognised and a credit to all of my colleagues for their work in making this happen. So in conclusion, we've been pleased with our performance in the first half, particularly our retail business. We've continued to grow sales and market share, demonstrating the strength of our balanced business model. As we enter the second half, we are encouraged by an improved picture in current trading across both retail and our design and installation business. This, combined with our productivity programme, underpins our outlook for adjusted PBT. We're delivering attractive returns to shareholders and importantly, we're continuing to invest in our growth levers so that as the UK economy recovers, we are well placed to capitalise on the growth opportunities this presents. Thank you for listening. Mark and I, we're happy to take any questions that you have.

From Investec. Two questions for me. The first one is just on the OPEX that you had some great control in the first half. I'm just wondering if you give us a feel for is that sustainable going forward or was there some shift in some sort of shorter term costs like marketing and things like that that could come back if demand starts to pick up? And then the second question is just looking into next year. Do you have any early thoughts on how many new stores you might open and refits as well? Thanks.

Do you want to do the OPEX question? I'll do the Storrs question.

Yeah. So the productivity initiatives that we've had are sustainable and will build through into next year as well. You mentioned marketing. There's been no pullback on marketing very much in line with the plan that we had for the year and previous years. And the productivity initiatives, there were no sort of big ones this year. It was a lot of small initiatives that have each contributed right across, whether that's energy reduction, store productivity, distribution initiatives, and also a reduction in stock loss through shrinkage, which has been a real focus for us and bucked the trend of the wider retail market. So all of those things will stand us in good stead for next year.

Super. Thank you, Mark. Just responding to the property aspect of the question, our expected cadence over the coming four or five years is around four to five stores per year. And as I always say, we've been really disciplined with the capital here. We're trying to find the appropriate long-term white space sites. And we have a good pipeline, so good visibility on that pipeline, but a cadence of about four to five stores a year. And in terms of refits, I'd be thinking through the lens of around about seven to nine per year. So probably touching somewhere between a dozen plus or so stores on an annual basis, a blend of new stores and the refit programme.

Cheers, thank you. Shane Carberry and good buddy, two from me if I can. Firstly, just in terms of the gross margin performance, if you could give me a little bit more colour on the levers there and in particular the promotional activity, maybe versus peers and things like that, be helpful. And then secondly, just in terms of the kind of value end kitchens, I'm trying to think through the amount of that that's going into retail versus design and installation. And has that shifted now in terms of with the lower price kitchens, there's a little bit more coming through the retail business, or just how should I think about that would be helpful.

Shall I do the first and then you do the second? Great, yeah. Yeah, so on gross margin, the first thing to say is that we are maintaining our strong price position in the market. The growth that we're seeing in retail, for example, As you can see, it's volume growth and we're growing market share, and we're doing that by being price competitive as well. So we're managing gross margin in that context. That's an important starting point. We, as a business, would like to be and are everyday low pricing. We have regular customers, particularly our trade customers, that want a consistency in pricing. We do offer targeted promotions, but a small number of promotions. And that's the kind of consistency and transparency that our customers want. We don't want to be dragged into high-low pricing with lots of promotions. And it's that careful management that has enabled us to deliver a good, stable gross margin. It's also worth saying that the volume growth that we're delivering is exactly what suppliers want. And we're probably the only player in the market at the moment that is giving that volume growth. And that does get rewarded by suppliers. So that's also supporting. The final component, I would say, is that there is a little bit of mixed benefit in terms of the decline in our design and installation business. But also, we're having to offset some of the mixed drag, if you like, of a growing trade pro business, because that's the fastest growth part of our business. And as you know, we offer a 10% discount there. So there are a number of factors going on, but overall, a really good job by the team in managing that.

And just thinking specifically, Shane, about the lifestyle kitchen range, what we do is those lifestyle kitchens that are designed through our showroom business, that business goes into D&I because it's taken a service as well as a product, so it's much more about our design and installation services and ranges. The rest remains in the retail business as we see it today. The vast majority still does sit in retail, actually, so there's good growth there anyway and just good attraction in the retail business, but an increasing part of the growth that we describe is the fact that we've now got this as a design proposition for customers, which is why I spoke to, just to give you a sense of, because really we do think about projects in our business, which is why I said if you actually look at all of the kitchen and bathroom projects that we do, bespoke and lifestyle, we're actually on an ordered sales perspective in the first half, actually only down 4%. So we are really picking up some good traction in the value end of the marketplace at the moment.

Amigala from Citi. Three questions, if I may. The first one was on design and installations business. Presumably the refits benefit that. But can you give us some color as to where is, you know, where are market volumes versus 19 in that sort of big ticket project business to get a sense of how far, you know, the prospect of recovery ahead? The second one was on cost inflation, broadly in the big buckets of, say, freight, staff and property. Can you give us some color as to what are you seeing in the underlying inflationary trends in those sub-segments? And the last one was on the dedicated project manager that you now have for each customer in the sort of design and installation business. Per store, how many sort of dedicated PMs would you typically have? at this stage, and how do we think about that growing ahead as the market recovers?

Do you want to do the – why don't you do the cost piece, and then I'll come back on both DNIs.

Okay. Yeah, so in terms of questions, Ami, on cost, where we're seeing the most inflation at the moment is in staffing. So, as you know, we have had two – consecutive years now of a 10% increase in national living wage, which affects a good proportion of our staff, but also, of course, has a knock-on effect on other colleagues' salaries in stores. So that's been a significant cost headwind for us. um freight is not a big cost for us generally because only a small proportion of our uh cogs come from asia most of them about 70 percent we we source from the uk um most from near europe of the remainder and then probably seven or eight percent of our cogs come from asia so overall freight cost is not a big component for us we have seen some delays as everyone has with what's been going on in the Red Sea, but actually it's a small part of our business and not a big cost impact. Property you mentioned, we've got a very good position on property, actually. About 15 pounds a square foot is what we pay on average across the estate. We are seeing good demand for high quality retail parks for store space of around 30,000, 25,000, 30,000 square feet, which is where we are. But at the moment, that's not translating into higher rents. And the rents that we've got are well locked into. sensible uplift in terms of collars and caps on RPI and things like that. So actually, our cost base from a property perspective is in good shape. We've seen a little bit of energy cost increase in the first half relative to the first half of last year, but that's now actually going to start to decline a little bit with energy in the market coming down, plus the initiatives that we've got going to reduce energy consumption. So I think of all of those factors, the thing that's really the standout in terms of inflation is in staffing.

Super. And just to your two D&I questions, Ami, in the first instance, we should probably think about the market in terms of where the leads are in the marketplace, so sort of like numbers of customers interested in getting into this journey. And broadly in the market, we're seeing somewhere in a range of sort of like minus 15 to minus 20% down in terms of leads. But that is definitely stabilising. That is definitely stabilising. In terms of the dedicated programme management, and we've developed tech to do this as well. So this is all run through a tech stack with an outsourced partner that we work with. So the good news is that is a flexible resource as projects go up and down. So it's not like we're banked in the hundreds of people working here. It's in the tens that flexes up and down, as it can do quite simply with the project flow as it comes through, which is one of the benefits of our overall design and installation business when we think about how we're organised. With installers and with programme management, we've got that flexibility of resource there. So it's a variable cost, not a fixed. So we're quite nimble around that.

It's Adam Cochran from Deutsche Bank. First of all, I'd just like to say I'm quite impressed that you're putting the solar panels on the Aberdeen store. I think if it works there, it must work in most locations.

Do you know, the job went incredibly seamlessly, really, really well. Hopefully you get some sun up there. If you just work in daylight hours, it's fine. You don't just need sun.

In terms of the current trading, can you sort of pick out any particular... categories or trends? Is it smaller projects that are improving or if there's anything to say on that at all? Secondly, on deflation, I know that we saw some big timber deflation coming through. How is that sort of picture evolving into any of the other categories or timber itself? And then thirdly, on the market share gains that you've seen, you have seen some market exits across various bits of the broader home improvement space at the moment. Do you think that your market share is coming from the exits of, I think you talked about good performance in tiling and flooring, for example. I think you've seen a few closures there. So just a little bit of a description about what's going on in the wider market, if you can, please. Thanks.

So in terms of current trading and themes and trends, I mean, I touched on it in the slides. You're absolutely right, Adam. What we're seeing is people have just been a bit more thoughtful, a bit more considered, and are still doing DIY, which is great to see, by the way. So the number of projects, we don't see an issue there. It's just how much they're spending. Interestingly, that does translate to our local trade customers as well. They're just being a lot more thoughtful about the amount of materials they buy for a job. You know, they're not overbuying, they're buying exactly what they need. And in some cases, actually, they tell us that they're recycling. If they saw on a sticker CLS in half, they might put the other half back in the van rather than put it in the skip sort of thing. So they're all just being a bit more thoughtful. And you can see that play out. I mean, with the tremendous growth that we've seen in our customer base in the first half, 18%, 14% sales growth. So you can see we're doing really well at getting the customer numbers in, but they're just being a bit thoughtful as to how much they spend. And I think that trend is here and still with us at the moment. So slightly smaller projects, everybody being a bit more considered. But of course, as a retail business, we're winning in this marketplace because you win by attracting customers and footfall. And we're growing customers and growing transactions quite significantly in our retail business, particularly with local trade I mean, market share is an interesting one because, you know, when we get the market, although we know all of the components of the market, we don't get the named account data. So it's much harder to see where you're winning share from. But we are consistently growing share. I do think we do do a good job in terms of outperformance and probably, probably getting more than our fair share when some may disappear from the market. in certain core categories, particularly when you look at decor and tiling and flooring and some of these categories. I think we're getting a little bit of a kicker there. But the broad thrust of this is we are outperforming in the first instance. It's an icing on the cake, not the actual driver in its first sense. And I don't, Mark, do you want to talk to the deflation point?

Yeah. So we've seen consistently in the first half between minus two and minus three percent inflation. The big drop in prices in timber now is kind of behind us. So we're not expecting strong deflation to continue. And if anything, I think probably trending back towards zero over the second half. Always quite hard to predict that, but we're not expecting deflation to get more severe.

Morning. Sam Cullen from Peel Hunt. I've got three also. Just coming back on TradePro, can you give some colour on, I guess, the split between average basket size and number of baskets shopped in the period and how that's trending? And then just some comments around the rate of pickup in the third quarter and walk us through again the operational gearing in the business. And if we do see volumes recover, how we should expect profits to move. And then finally, on the kind of crystal ball gazing, you've talked around where D&I is in terms of current levels of leads. How do you think about the kind of catalyst you need to see to see volumes return to that market?

I'll do the, if I do the TradePro point and then you do the, probably do the next two.

So in terms of TradePro, I mean, Sam, just really building on my previous response there, it's absolutely about transactions and footfall. So this is customer growth that is driving the TradePro growth. When you get into the basket, what you can see on balance is you can see some deflation in the round because we've been seeing deflation on the nature of those products, particularly to the timber points, despite its stabilisation more recently. And items per basket is, you know, sort of like broadly about flat actually. So what this is, this is a footfall driven growth, which is great in the first instance, because as things start to come back on both the way to purchase and the frequency, We're in the driving seat. But this is all about growth of transactions, growth of that strategic customer base, which is working really well.

Yeah. In terms of operational gearing affecting our profitability as things pick up, you'll have seen what happened in the profit bridge in the first half, where the drop through in the sales decline of design insulation flowed straight through to profit. But we were able to mitigate that with really tight management of costs and gross margin. I think that the good news is that the operational gearing works in reverse, and as we see design and installation in particular pick up, but alongside a strengthening retail position, then that will be obviously good for profit going forward. So, yeah, it works both ways. And to Kate's earlier question, the productivity initiatives that we've put in place this year will be embedded into the business. They're not one-offs to try and address a particular short-term issue. They are longer-term improvements. You talked about catalysts for D&I. I think from a macro perspective, some of the trends that we would want to see, we are now seeing. So housing transactions improving is helpful. Lower interest rates, of course, will support that. Consumer sentiment is improving, as we know. All of those things, I think there's a bit of a lag between an improvement in those indicators and then big ticket items coming through. But they are all going in the right direction. The other one that we look at closer to home is in our Mood of the Nation survey every month. One of the questions we ask our home improver customers is their intention to buy a kitchen or bathroom in the next 12 months at the moment that is quite a bit lower than our historical average but it's been flat for some time so we think we've kind of hit the bottom and hopefully the next move that we see will be an upward one but we haven't seen that yet so we're still waiting to see that pick up but we think we're probably at the bottom

Hi, it's Matthew McEachern from Singer Capital Markets. Couple for me if that's okay. Can we just go into the lifestyle kitchen sort of theme here and just do you have some data now which would either say yes or no with regards to the customers that are shopping there being new to Wix or were they already Wix shoppers and they've just now got the ability to shop at the lower end of the kitchen range?

So without the exact data, on the basis if you think of our classic retail tiering, we were very much in better and best through bespoke and showroom. We had a much lower presence in sort of like the good part of things. So having now reset the ranges, you know, 11 new ranges really got behind that business. I think we're genuinely attracting a new customer to that category. Probably they were a Wix customer somewhere in the mix. They could have been a DIYer or a local trader. I don't have the exact breakdown of the true incrementality. What I can see is the true incrementality of the sales, which is good. And we should remind ourselves actually that 70% of all of the kitchen volume of projects in the marketplace are £4,000 and below. And typically we've operated very successfully, but in the top 30. And now we're starting to build out, I think, a really credible an engaging proposition in that 70% volume opportunity.

But on balance, you feel that the incremental new customer wins into the rest of the business is probably modest?

No, I think they can now buy a kitchen project with us where probably it was beyond their remit. That's where I'd be. If we look at the growth to the earlier question, what we are seeing is the engagement of the design in that new kitchen at a more affordable rate is working really well. Okay. All right. Thanks.

Just a quick one on solar and SolarFast for a sec. So the 50 store trials that you've got out there at the moment in the estate, they've been branded Wix Solar. Are you running a dual branding situation at the moment where you've still got SolarFast and Wix Solar? Is that right? And will that be, is that an ongoing theme? And did you test, are you testing different gondolas? Have you gone out with, you know, different sized display units, different setups, or is it a single consistent approach? And then the final one, obviously you've got some encouraging trends that have come through, I think, those store trials. Do you want to give us a little flavour as to what's been going on with the online trial? I mean, I suspect that's more of a permanent development, but just give us a little flavour as to what's coming through the pipeline online as well.

I'll have a perspective, of course, Matthew.

so uh as you say yeah 50 stores we've put a gondola end in and and there is some variation that we're we're testing with a handful of them we have got manned gondola ends with an agent that's specifically there to talk to customers about solar in the remainder the majority of them we are just using colleagues to engage with customers to talk to them about about solar In the stores that don't have a gondola end, they have a stand-up banner in the store, so a slightly smaller presentation of solar, but we're seeing how that goes as well. What we're testing is the messaging and the way that we present it on the gondola end. We'll get feedback from colleagues, feedback from customers and the conversations they're having, and we'll learn from that before we roll out to the rest of the estate. But what is encouraging, as David said, is that we are seeing people come through that channel. To the branding question, we're branding this as Wix Solar. So people know that Wix are behind this. It also says underneath in smaller letters, powered by SolarFast. because this is the business that's delivered thousands of successful installations to customers. So we have the real credibility there. And that's the way for now that we want to brand it and we'll see how that evolves over time. But we think adding the Wix brand is incredibly important because as David mentioned in his presentation, this is a market that doesn't have trusted value. And although SolarFast has the credibility of having done a lot of installations as a brand itself is not very well known. And then online, yes, now online will be always on. The advantage of online is you can make lots of tweaks as you go along with stores. You've got to do that in more thoughtful ways because of the physical investment. But we are seeing people come through the online channel more. And the encouraging thing is that, as David mentioned, people are going on the Wix journey, and that's translating through into solar panel installation. So we're getting sales through. At the moment, about 20% of solar fasts sales are coming from Wix.

Okay, that's very interesting. Thank you. And how long do you think you'll run the trial? 50 units before you then start making some bigger decisions?

We've been in now probably about six weeks, something like that. I think we'll probably need another six weeks or so and then we can start to adjust and put in what we think will be the, I don't want to say final execution because of course it will always evolve, but the sort of the permanent one that will go into the wider estate.

Matthew, if we think about the end game, where are we building steps and understanding insight to get us to? The end game will be, this will be just another design and installation service that is provided by our business ultimately under the Wix banner in the same way we do tiling, flooring, joinery, but kitchens, bathrooms. So that's the direction of travel. What we're doing is optimising our route to get to that position in time.

Great, thank you.

Hi, David Mark, congrats on the results and good to see you again. Just a question, please, on market share. is there any kind of particular call-outs in terms of geographies where, you know, be it in London or outside of London, outside the M25, and be it from a regional basis, north versus south? And then is the kind of the share gains being led very much by, obviously you talk a lot about the innovations and the productivity gains, but also around kind of pricing. And have you actually given kind of the market share splits in terms of where you are retail and design-led versus kind of comps at all?

The short response to the end of that question is no. In terms of the overall market share, it's a great question, but it's really interesting. It's pretty benign, actually. When we look across the geography of the UK, it's pretty benign. There's no real standout regions of difference in terms of performance. So there's nothing material to talk to there. In terms of categories, I mean, we are, you know, we're a very strong player, as you know, not surprisingly, in areas like building materials, timber, you know, tiling, flooring. We have, for a few years now, been very purposeful around building out, decorating, garden, and the more common sort of like DIY projects where we've significantly actually outperformed more recently. So as I sort of like called out earlier, you know, decorating, garden, tiling, flooring for us at the moment are really strong performing categories, and we're delighted with the efforts. I mean, some of the other stuff I spoke to, I mean, acoustic wall panelling, it's quite a new and innovative category, but we're there with a phenomenal product at phenomenal value, and we're seeing really good sales, so we're delighted with some of the innovation. But the truth of the matter is, innovations, of course, it's very important, particularly with a business that is, you know, two-thirds own brand. We're a very strong own brand business, but the cornerstone of that own brand is just great value every day by definition, and that's what really works in this marketplace. There's certainty and simplicity about our value, quality in our service and the digital proposition that just works so well for our customer base in the round.

Just to clarify one point on the market share, your question between retail and design and installation. The market share numbers that we quote are just retail. There isn't a reliable market for market share data for design and installation. Thank you, Mark.

Any more questions, team? Do we have anything online at all?

There are currently no questions from the webcast, so happy to hand back to David and Mark for any closing remarks.

Super. Well, I'll finish where I sort of finished in the first instance. Look, I think in summary, we're really pleased with our performance in the first half, particularly in our retail business, which does continue to grow both sales and share. And I think that just really demonstrates the power of both our proposition and our balance. business model. As we've spoken about, I think at length today, look, as we enter the second half, there is, you know, we are encouraged by an improved picture in terms of current trading, a strengthening performance in retail and a stabilisation as we see it in terms of design and installation at this moment. And when you combine that with our productivity programme and our really good cost management, you know, we're happy with where we sit in terms of PBT. And, you know, we're delighted that we can deliver great returns to shareholders, £29 million in the first half. That's a really strong sort of like return to the shareholder base. But at the same time, we continue to invest. And as this economy starts to recover, we think we're really well placed to continue to outperform, take share and grow the business. So thank you, everyone, for your time this morning. As ever, a pleasure and look forward to seeing you all soon.