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're delighted to share with you our first-half results for 2025. We'll spend the next 20 minutes or so taking you through the performance of the business, broader market trends, and highlighting the great progress we are making on executing our strategic plans. I'm pleased to report that both our retail and our design installation business has had a strong first half. Our retail business has continued its volume-led sales recovery trajectory, resulting in record market share. And the self-help actions we took last year and earlier this year to transform our design and installation business are resulting increased project volumes, a return to like-for-like sales growth and driving market outperformance. This sales growth plus our productivity plans are driving operational leverage. A 5.6% increase in group revenue combined with our productivity savings, which has helped to offset inflation, has resulted in a 17% increase in adjusted profit before tax of £27.3 million. We continue to pursue growth through targeted investment. When it comes to our store estate, in the first half, we opened one of the five to seven new stores planned for the year and refitted a further four stores with more refits to come in the second half. And this year, we have stepped up our investment in tech to underpin and advance our growth and productivity plans. And Mark and I will share more on this later. And of course, we continue to invest in product innovation with new ranges in retail and some great stylish kitchen and bathroom ranges that are proving very popular with customers. We are delivering attractive returns to shareholders and have announced today an interim dividend of 3.6p, whilst the 20 million share buyback that we announced in March is ongoing. Before I hand over to Mark, I'm pleased to say that we remain comfortable with market expectations and our overall output for adjusted PBT remains unchanged. And finally, I'd like to take this opportunity to thank all of my colleagues for their incredible work in delivering these results and providing great customer service. 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. So as David mentioned, we've had a strong first half with good growth in sales and profits. On this page, we have some of the headlines. So revenue for the half was £848 million, up 5.6% versus H1 2024. Within that, retail was up 6.8% and design and installation delivered sales up 2.1%. We've had strong profit flow through, with gross margin up 79 basis points and a 17% increase in PBT to £27.3 million. We continue to operate with a strong balance sheet, ending the half with £158 million of cash. This performance and strong balance sheet have enabled us to continue delivering good returns to shareholders. As David mentioned, we're announcing this morning an interim dividend of 3.6 pence per share, and we continue to buy shares back in our 20 million buyback programme. We'll break out more detail in the next few slides, but here we have a summary of our P&L. As I mentioned, we grew sales in both retail and design and installation, in total increasing revenue by 45 million versus the first half last year. Gross margin rate increased by 79 basis points as a result of volume growth, category mix and lower consumer credit costs in our D&I business, which when combined with the sales growth resulted in the pound's gross profit increasing 7.9% year on year. Operating costs increased by 7%. A good productivity programme enabled us to mitigate some but not all of the significant cost headwinds that are facing us, in particular the increase in national living wage and national insurance. More on this in a moment. Overall, this enabled us to deliver a 14% increase in operating profit and a 16.7% increase in adjusted PBT, demonstrating the healthy operational leverage of the business when in growth. So let's look at the P&L drivers in more detail, starting with sales. In the retail side of the business, we continue to deliver really well, most clearly demonstrated in our market share position, which continue to strengthen. And David will touch on this more a little later. Within retail, we saw good, positive, like-for-like growth driven by both TradePro and DIY. The number of active TradePro members increased to 615,000 and TradePro sales grew by 10%. DIY sales were in mid-single-digit growth. As you can see from the table on the right, this growth in retail like-for-like has once again been driven by volume with negligible inflation in the business. In design and installation, our sales performance has continued to improve. The order book has been growing consistently since Q4 2024. And with the usual time lag, we are now delivering that revenue, with Q2 being the first quarter of delivered sales growth since Q2 2023. For the first half as a whole, like-for-like growth in design and installation was minus 1%, with total revenue growing 2.1%, supported by new store openings and Solarfast, which only went like-for-like in June. The profit bridge on this slide helps highlight the key drivers of the 17% growth in PBT. The strong performance in retail margin came from an increase in both sales and margin rate. In design and installation, the progression into delivered sales growth in Q2 meant there was a small increase in gross profit in the half, and clearly the trend for D&I is positive and encouraging for the rest of the year. On costs, we've shown here the impact that the strong volume growth has had on our cost base, with around £7 million of volume-related costs increased. We can then see the impact of inflation, £8.7 million in the half, which is quite a bit higher than on the same chart last year, which showed about £5.5 million of inflation in the first half, reflecting the increasing pressures of national living wage and national insurance coming in the business. Our productivity programme delivered £5.5 million of savings, slightly higher than H1 last year, which is encouraging, but clearly, as the chart shows, not enough to completely offset the cost inflation. We continue to invest in our business, and investment initiatives that hit the P&L resulted in 5.4 million of incremental costs year on year. In addition to costs relating to new stores and refits, we've also increased the investment in technology. This IT investment is set to increase further in the second half, and David will talk more about this in a moment. Turning to cash. We are a strongly cash generative business and even in a challenging economic environment, we can generate cash to reinvest in the business, pay a healthy dividend and buy back shares. We ended the half with 158 million of cash. Now, as you'll recall, we have seasonality in our working capital cycle in which we have a significant improvement in working capital in the first half of the year, which then unwinds in the second half. Now, the working capital position will normalise in the second half of this year in the usual way, but it will leave us with an average cash position across the year well ahead of our December low point. The strong cash flow from our growing profit and our healthy balance sheet gives us flexibility to invest further in growth initiatives as well as to accelerate the returns to shareholders. On growth, our CapEx plan, which is predominantly invested in new stores and refits, was £9.5 million in the first half and will be between £30 and £35 million for the year as a whole, with the programme clearly back-weighted to the second half. In H1, we returned £25 million to shareholders in the form of dividends and buybacks, and we also spent £11.9 million buying shares for our employee share scheme. So overall, a very healthy cash position. I'll end with some comments on outlook and guidance. So far in Q3, trading has been in line with our expectations with all three parts of the business, trade pro, DIY and design and installation remaining in growth. We expect costs to increase in the second half, with the full effect of the increase in national living wage and national insurance, which only came in in April, plus the back-end waiting of our new store opening programme. We'll also be stepping up our investment in technology. For the year as a whole, we'll be spending around £10 million more on SAS projects, with the cost going through the P&L, than we did in 2024. Despite these increases in operating costs, our strong trading performance means that we remain comfortable with consensus expectations for PBT for the year. Now, there's also some technical guidance provided on the slide there. I won't read it out, but it remains unchanged from what we gave at the beginning of the year. So to summarise our position at the half-year point, the business continues to deliver really well with all three parts of the business delivering good sales growth. Despite significant cost inflation, we're delivering good operational leverage from that strong sales performance, with PBT growing significantly faster than sales. And this is enabling us to continue investing in the business and at the same time deliver good returns to shareholders. With that, I'll hand back to David.

Thank you, Mark. Now, of course, it wouldn't be a Wix presentation if I didn't share with you this slide, our growth lever framework. Our sustained market outperformance is a clear demonstration that our uniquely balanced business model and strategic growth levers continue to deliver results and achieve our very simple purpose, which is to help the nation feel house proud. I'll take a few minutes to share how we are investing in these growth levers to continue to win in this market. But before I do that, I thought it would be helpful to look at some of the current consumer trends we are witnessing as we put our strategy into action. As you are aware, we keep a close eye on trends through our monthly Mood of the Nation survey. Our local trade customers tell us they continue to be busy with healthy pipelines of work and one in four of them telling us that they're booked up for a year in advance. For customers in the market for a new kitchen or bathroom, we are seeing that planned spend remains stable, although still below historical norms. It's worth noting that as people have been holding off buying a new kitchen or bathroom, they are getting older and simply more worn, so inevitably there is a backlog of volume building up. And turning to DIY, people still want to improve their homes and continue to prioritise DIY projects in the home and garden. And as ever, speed and convenience is important to them. In our most recent survey, 60% of them are saying faster deliveries and that they are happy to pay for more for the same day service. We are particularly pleased that sales growth is volume-led, and this is all down to more customers coming through our doors or shopping online. In our retail business, the TrayPro engine is truly motoring ahead, with sales up 10% and active membership, as Mark said, growing to 615,000. We are driving up DIY customer numbers through purposely broadening our appeal, attracting new customers by innovating in strategic categories and engaging communication. Our Proud as a Peacock advertising campaign is working very well for us. And in case you haven't seen it yet, here's one of our latest TV ads.