Wickes Group plc

Good morning everyone and thank you for joining us here today and also for those of you who are joining by webcast. I'm here with our CFO Mark George and together we would like to take you through the performance of the business for the year ending 27th of December 2025. Sharing how our proven growth levers are continuing to drive strong market outperformance. We'll also share with you our plans to accelerate our store rollout as we see an exciting opportunity to bring the Wix brand to even more customers across the UK. First, turning to last year's business performance, this was a stellar year for Wix with both retail and design and installation showing strong volume out performance. More customers shopping with us has resulted in volume-driven sales growth in our retail business as we have grown market share to record levels. In design and installation, the momentum from the transformational actions we took at the end of 2024 and into 2025 has continued and we have seen a fifth consecutive quarter of ordered sales growth. And at a group level, our sales growth of 5.9% is driving operational leverage, resulting in an increase in adjusted profit before tax of 14.4% to 49.9 million. So it really has been a great year for Wix, and I'd like to take this opportunity to thank all of my fantastic colleagues for their incredible work in delivering these results. We have continued to invest in our store network with the opening of five new stores and 11 refits. This investment in our store estate delivers consistently good returns and shortly I will share with you why we believe we should accelerate this investment as we have the opportunity to go faster and further to a revised target of 300 stores versus the 250 we had previously announced. We continue to deliver attractive returns to shareholders and I'm pleased to announce that we've maintained our final dividend at 7.3p and have announced today a further 10 million share buyback. Trading in the first 11 weeks of this year reflects the strength of our balanced business model. With outdoor product demand having been impacted by the weather, we've experienced continued volume growth across indoor projects and design and installation. I'll now hand over to Mark to take you through the numbers in more detail.

Thank you, David, and good morning, everyone. As David mentioned, 2025 was a strong year for the business with good growth in sales and profits. Revenue for the half was 1.64 billion pounds, up 5.9% versus 2024. Within that, retail was up 6.5%, and design and installation delivered sales were up 4.4%. we had a strong profit flow through with gross margin up 44 basis points and a 14% increase in PBT to 49.9 million pounds. We continue to operate with a strong balance sheet, ending the year ahead of expectations with 92 million pounds of cash and averaging 153 million of cash across the year. So this profit performance and the strong balance sheet have enabled us to continue delivering good returns to shareholders. As David said, we've announced our full year dividend of 10.9 pence per share. We've completed the 20 million share buyback for 2025 and today announce a further 10 million buyback. So we'll break out more detail in the next few slides. But here we have a summary of the P&L. As I just mentioned, we grew sales in both retail and design and installation, in total increasing sales by 92 million across the year. Gross margin rate increased by 44 basis points as a result of volume growth, category mix, and lower consumer credit costs for design and installation, which when combined with the sales growth resulted in the pounds gross profit of the business increasing 7.2% year on year. Operating costs increased by 6.7%. A good productivity programme enabled us to mitigate some but not all of the significant cost headwinds facing us, in particular the increases in national living wage and national insurance. In addition, as previously guided, we stepped up our investment in tech this year by around £8 million, building the foundations for future growth. Even with this significant step-up investment, we delivered an 11% increase in operating profit and a 14.4% increase in adjusted PBT, demonstrating healthy operational leverage of the business as it grows. So let's look at the P&L drivers in more detail, starting with sales. In retail, we delivered a consistently strong performance with sales growth above 6% in both H1 and H2. We saw good positive light for light growth driven by both TradePro and DIY. The number of TradePro members, active members increased to 643,000 and TradePro sales grew by 9%. 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 exclusively driven by volume with mild deflation for most of the year. So turning now to design and installation, our sales performance has continued to improve following the initiatives that were launched in the second half of 2024. The order book has now grown for five consecutive quarters, and with the usual time lag, delivered revenue has now had three quarters of consecutive growth. The dark blue blocks on this chart show the non-like-for-like sales growth, which comes from a combination of new stores plus sales from Wix Solar prior to the anniversary of the acquisition, which happened towards the end of H1. The profit bridge on this slide helps to highlight the key drivers of our 14% growth in PBT in the year. The strong performance in retail margin came from an increase in both sales and margin rates. And on the equivalent chart last year, design and installation was actually a drag to profit. But as you can see here, the progression we've made into delivered sales growth has meant that D&I profit was in growth, adding to the overall profitability of the business. On costs, we've shown here first the impact that the strong volume growth has had on our cost base, with around 17 million of costs directly linked to the additional volume going through the business. We can also see 17 million of inflation in costs, which is quite a bit higher than on the same chart last year, which was around 13 million, reflecting the increasing pressures of national living wage and national insurance, among other cost headwinds. Our productivity program delivered 12.4 million of savings in the year, in line with last year, but not quite enough to completely offset the cost inflation. We continue to invest in the business for the future. And investment initiatives that hit the P&L resulted in 12.9 million increase in costs. The biggest component of this was the 8 million step up in tech that I mentioned earlier. We also had around 3 million of net P&L impact from new stores in terms of pre-opening costs and losses in the first few months of trading. This will of course become increasingly a factor as we roll out the estate further. So overall, this shows a very healthy performance across the year. We increased PBT by 14% whilst absorbing around 16 million in costs for initiatives that will benefit growth and sales and profits in future years. So turning to cash, we are a cash-generative business, and even in a challenging economic environment, we can generate enough cash to reinvest in the business, pay a healthy dividend, and buy back shares. We ended the period with 92 million of cash, but as we know, December is a low point for us in our seasonal working capital cycle. We averaged 153 million of cash throughout the year. A couple of things to draw out from this bridge. The first is the strong working capital contribution of 25 million pounds, which last year was flat. This was driven by a strong growth in the design and installation order book, improvements in payment terms with some suppliers, and the timing of certain projects where the cash will go out in 26 rather than 25. We expect some of these benefits to unwind in 26 and result in a five to 10 million drag on working capital this year. The strong cash flow from our growing profit and our healthy balance sheet give us flexibility to invest further in growth initiatives. Our CapEx plan, which is predominantly invested in new stores and refits, was 28.7 million of spend in the year, a little lower than our guidance of 30 to 35 million, as one or two projects have taken longer to come to fruition and will now be launched in 2026. Also in 2025, we returned 45 million pounds to shareholders in the form of dividends and buybacks. We spent a further 12.5 million buying shares for our employee share schemes. So overall, a very healthy cash position. And this is the foundation on which we can now accelerate investment in our business, which David will talk you through in a moment. I'll end with some comments on outlook and guidance. So far in Q1, we've seen the benefit of our balanced business model, as David said. Whilst outdoor categories have been impacted by the wet weather, we've seen good growth in our indoor categories, and we've continued to grow market share. We remain comfortable with market expectations for growth in PBT in 2026. And in terms of our other guidance, I wanted to call out a few from the list here. Firstly on tax, after a lower than normal effective tax rate in 2025, due to a successful capital allowances claim, we'll return to a more normal level of ETR, slightly above the standard 25% tax rate. Our capex will step up to between 40 and 45 million pounds, partly as a result of some of the projects that were left over from 2025, and partly as the plans step up as we look to accelerate our investment. As I mentioned earlier, we anticipate a partial unwinding working capital. Today we've announced a 10 million share buyback, which as David will explain, will be the last one for the time being as we look to step up CapEx investment in the business over the next few years. In addition to the buyback, we will also be buying shares for our employee share plans rather than issuing new shares. And finally, on dividends, we plan over time to increase the dividend and the dividend cover so that we are operating within the cover range of our capital allocation framework of 1.5 to 2.5 times. So in summary, the business has had a very good 2025. We delivered good growth in sales and profit whilst increasing the levels of investment in the business. We now plan to build on this with a new bolder ambition for future growth, which David will talk you through now.

Thank you, Mark. It wouldn't be a Wix presentation without our strategic framework for growth. The very fact that I presented as every results announcement demonstrates just how the consistency and clarity of our strategy is working so successfully, enabling us to drive growth and market out performance. Over the next couple of slides, I'll share the actions we've taken across our growth levers and the results we've achieved in the past year. But before I do that, let me touch on some consumer trends that we are seeing across the UK home improvement market. As you are aware, we keep a close eye on trends for our monthly Mood of the Nation survey. Our local trade customers tell us they continue to be busy, with over 30% having a 12-month plus healthy pipeline of work. For customers in the market for a new kitchen or bathroom, we are seeing that planned spend has been stable over the last few months, whilst remaining below historical norms. And turning to DIY, people are still keen to improve their homes and with one in two consumers planning to decorate a room this year. And speed and convenience is increasingly important to them. In a recent survey, almost 60% said they expect faster deliveries and that they are happy to pay more for same-day service. Our TradePro membership scheme goes from strength to strength, with sales up 9% on the back of an increase in active members to 643,000. I'm sure I don't need to remind you that these are our most strategically valuable customers, spending on average 10 times more in a year than a typical DIYer. In DIY, we continue to broaden the Wix brand appeal through our range reviews, innovation, and communication. Once again, this has resulted in growth in this customer base. We know that customers value the products and services we offer as we see this coming through strongly in our customer satisfaction metrics. For example, 85% of customers rate our click and collect service as excellent or good. That rises to 89 percent for our home delivery service, which we operate from all stores. Value, convenience, and speed really matter to our customers. Our digitally-led service-enabled business model enables us to provide all three seamlessly. We continue to maintain a market-leading price position, and during the year added a number of new initiatives to offer customers even faster, more convenient service. including a new 15-minute click and collect and the launch of Wix Rapid, whereby customers can have home delivery of products weighing up to 800 kilos same day in under three hours. This is proving a game changer for local traders, saving them time and money when they're on a job. Although it's still early days, the customer satisfaction scores have been very positive, generating a healthy number of repeat customers for this service. I mentioned earlier that last year has seen us reach record levels of market share, and you can see from this graph the impressive step up we've seen over the past 12 months, a clear output of the outstanding execution of our consistent strategy. This year has been pivotal for our design installation business as the transformational actions we took at the end of 24 and last year have yielded results. As this chart shows, the performance of delivered sales has been strongly positive for the last three quarters with momentum continuing into Q1 this year. Many of you came to our D&I Investor Insights event at our Stains store last October, and all the exciting new initiatives we shared with you then are having a positive effect on the customer experience and translating into sales. Founding on a deep understanding of what matters most to our customers, we continue to innovate our ranges. For example, we've added paint to order to our bespoke kitchens offer and extended our furniture colors in our value-led Wix lifestyle range. We have also made significant digital and physical enhancements to simplify the customer journey, including our new design tool. While its full benefits are still to come, it is set to really transform how customers will be able to visualize and create their new kitchen and bathroom in the future. Crucially, our customers are telling us that we're hitting the mark, giving us a 4.4 excellent score on Trustpilot. Turning to our solar installations business, Solarfast is now fully integrated in the Wix Solar brand and we are focused on building the foundations for future growth. Wix Solar is on prominent display in all our stores and we're also growing our digital presence to build brand awareness. We have been delighted to welcome customers into five new stores in the year at Leeds, Moore Allerton, Bury St Edmunds, Dunfermline, Southport and Northampton, all of which have got off to a great start and are performing well. We have refitted and refreshed a further 11 stores with 83% of the estate now in the new format. And our property plans for 26 include another four to five new store openings, along with 15 to 20 refits and refreshes. Shortly, I'll talk more about our property ambitions, but before that, let me just conclude with the key highlights from across our responsible business strategy. In 2025, we had a number of highlights, including being ranked as the UK's number one retailer in the Financial Times Best Employers Survey. Our community program continues to support local charities and community groups up and down the country with over two and a half thousand projects benefiting from free Wix products and volunteer support. In April, we launched a new two-year partnership with CALM, the suicide prevention charity. We are well on our way to hitting our 2 million fundraising target, having already raised an incredible 1 million to date. And it's fantastic to be recognized for all the work we do as part of our responsible business strategy with highly positive ESG ratings, achieving a strong A- rating in CDP climate change and maintaining a AAA rating in MSCI. Now I'd like to take a few minutes to outline our future growth ambitions for our store network. As you know, we operate in a large market with strong fundamentals. If we take both product and installation services across the UK's home improvement, kitchens, bathrooms, and solar markets, we calculate our addressable market is around about 35 billion. Within this market, we see a significant opportunity for long-term growth. With a relatively small share of around 5%, there's plenty of headroom for growth through taking more share. which is why on the back of another year of successful growth and market outperformance, we are reframing our expectations about our opportunity to materially grow share by expediting our property ambition. Our proven operating model and strength of our balance sheet means that we now see the opportunity to dial up the growth drivers within the business, working within our capital allocation framework. The store performance of existing and new stores together with our proven ability to operate successfully in smaller footprints provides a body of evidence that gives us the confidence to go faster and further with our new store rollout program. And as a result, we're increasing our ambition, as I've said, to 300 stores across the UK. Back in 22, we said we had plans to open around 20 new stores over the next four to five years. We're on track with that program. And in the past three and a half years, we've opened 13 stores, which are performing well. The store's sales and margins are maturing as planned. We're on track to meet our Roki target of 25%. And just to give you a sense of how a store typically builds up to maturity, the design and installation element of the store will be the first to grow sales, followed by DIY, then local trade as that customer base strengthens over time. Our new store opening strategy is focused on identifying white space opportunities and building our brand presence in underserved larger towns and cities up and down the UK. Our proven ability to operate successfully in a smaller footprint store opens up a greater volume of potential sites that we can consider. And just to be really clear, I'm not talking about a new format, but our ability to execute Wix in a smaller footprint than the current group average. These stores will have a full and compelling retail offer and a kitchen and bathroom showroom similar to any existing Wix store. Our efficient 4C operating model and fantastic colleagues enable us to deliver the same customer proposition just from a smaller footprint of 15,000 to 20,000 square feet, rather than the 27,000 square feet average that we have across the estate. You can also see from the table we deliver a similar EBITDA to the group average from a smaller store. We are trading a number of these smaller footprint stores already, including our Stains store, which many of you would have visited recently, which generates in excess of 10 million revenue a year from a 20,000 square foot footprint. So we've proven our capability to successfully deliver the Wix customer proposition and make the financials work in a smaller store. And it's a critical component of our property strategy. giving us access to a greater number of economically viable sites, typically in catchments with a lower population and also infill of major urban areas. Of course, the key to a successful property strategy is picking winning sites, and we are very mindful that as we look to accelerate our network growth, we do so in a focused, disciplined, and highly selective manner. Over the next couple of years, our property team will be identifying locations, undertaking commercial negotiations with landlords, seeking planning permissions, and managing construction to secure a healthy long-term pipeline. And it's worth mentioning that Wix is viewed as a very good tenant. We have the highest 5A1 covenant rating. We add to the diversity of a retail park as a speciality home improvement brand. Plus, we are a growing business, all of which is very attractive to a landlord. Once we have secured the pipeline, we will then be in a position for our rollout program to accelerate from 28 onwards with around 10 plus new store openings per year. At the same time, we'd expect to increase our refresh and refit program to around 20 stores per year. The majority of these will be refreshes as 83% of our store estate is already now in the new format. This means that over the next few years, the refit program will evolve into an ongoing maintenance capital refresh program. And as you can see here, how we expect to effectively double our investment in store capex in 28 from the 20 to 25 million we will spend this year. So we are very excited by the growth opportunity that presents itself. And we are equally confident in our ability to realize our 300 store ambition. We have a well-versed and proven approach to picking winning sites. We have the capacity and resources in our property function to effectively manage the accelerated rollout. And most importantly, we have a model that works. Wix deserves to be in more locations across the UK, giving our customers the chance to experience the Wix brand. Our ambition for 300 stores will create over 2,000 new jobs supporting communities nationwide. Our capital allocation framework is well established. Within that framework, we are now focusing more on growth investment. We continue to maintain a strong balance sheet and a revised store rollout program increases property capex by 20 million per annum in the medium term. The strength of the business's cash flow generation will enable our plan to increase both dividend and cover as profits grow. And as always, any surplus cash will be returned to shareholders through share buybacks. So in summary, it's been a super year for Wix. Our highly differentiated business model has served us well as we continue to win market share and grow volume. We see significant headroom to increase our market share in the UK's 35 billion home improvement market, and we are scaling up our property ambition to go further and faster with our new store opening program. This is underpinned by our strong cash flow generation, enabling us to increase investment in our proven growth levers, in addition to delivering attractive returns to shareholders through our dividend and share buybacks. Thank you for listening. Now Mark and I will be very happy to take any questions you have.

Great, thank you. Matthew McEachern from Singers. A couple of questions just on the store expansion ambitions. In terms of the... It'd be useful to just get a little bit of a flavour around how much of the extra target has come from infills rather than white space. I mean, even just a flavour would be very helpful. And I think you've indicated an approximate... EBITDA, which is very comparable to the existing estate, but from a smaller footprint. I mean, is there anything that would lead to or would prevent your return on capital on this new phase of growth being ahead of the most recent one? It feels like the capital spend probably will be slightly lower.

So Matthew, thank you for that. I think on balance, if we look at the sites and the opportunity, more will be found in pure white space versus sort of like those conurbations where we feel we're underrepresented. Yes, there are a handful of conurbations where we're definitely underrepresented. I always use Glasgow and Bristol as two good examples. We still only have one store in Glasgow. But who knows at this at this moment in time? So I think the balance I would be thinking at least like 70% pure white space, maybe 30% deepening presence and penetration in larger towns and conurbations.

Yeah, and on returns, I think we'll be aiming for the same level of return. And being able to have a smaller site enables us to take something with a smaller rent that would typically have a smaller revenue than a bigger catchment, but gives us a balance of returns. So that's the equation. That's why we're now able to stretch into more sites where previously the returns might have been a bit too low if we tried to put in perhaps a 30,000 square foot box, but a 15,000 to 20,000 just gets it into our returns threshold.

Hi, Grace Gilbert from Jefferies. A few questions for me, also on the store estate, on the new rollout. First being, you've obviously made such a big headway around the design and installation component of your business. Given that the stores going forward will be on more of the smaller side, how do you expect to continue to have D&I still be the main focus when you might just have less space in those stores? Or is the focus now to be more on the tradesperson and having that be kind of a... I don't want to say a screw-fix model by any stretch, but something along those lines, because that came to mind. That's the first, and then I'll go on the next one.

I'll take that one, Mark. I think it's firstly great. It's really important to underscore this is not a new format. This is us just rolling out the capability that we've demonstrated to run the entire Wix proposition in a smaller store footprint. And I say Stains is a great example that many have seen more recently. The way it principally works is if we're in a store as small as maybe 15,000 square feet, you will definitely have a mezzanine. And you'll be putting 4,000 to 5,000 square feet in the showroom in the sky. And that's probably the optimum model, actually. Having the showroom in the sky is the best thing to do in a store. But if the store is 20,000 to 22,000 square feet, we can actually accommodate the showroom downstairs. So we have a way of flexing, but the smaller the footprint, the most likely the showroom will be in the sky. The bigger the footprint, you can actually accommodate that downstairs.

And then kind of on that same vein, you've obviously done loads of work around refits and refreshes of the current estate already. Are you open to the fact that any of the new learnings that you have in this new store rollout, you might have to make some changes for the old estate as well? Or are you more confident that the refreshes that you've done are sufficient?

I think that's where the refresh program comes into play versus refit. So refit is a more meaningful intervention as a store level to get it up to the Wix model. We will continue to go back on some of those earlier refit stores and refresh them as we move through. So as I said, really, there's an important part of our property capital that now just becomes maintenance. It's just keeping the estate that we spent a number of years getting to a really sharp condition in that sharp condition. And then, as I say, the emphasis then much more into the new network. Thank you.

Hi, David Hughes from Shore Capital. A couple of questions from me. First of all, in terms of cash generation, obviously cash has gone up year on year, kind of despite the share buybacks and the dividends that you've paid out. Do you have a view of the right level of net cash that you're looking to in terms of us taking that forward and thinking about future returns to shareholders? And then secondly, just on the kind of more macroeconomic side of things, Obviously, you know, recent turbulence on the geopolitical scale is having a knock on effect already. How do you view the kind of sensitivity to Wix on that? Is it more on the cost side of things with things like freight and energy, or is it more towards the impact on consumer demand where you're kind of more cautious, should we say?

I'll pick up the question on cash. So the capital allocation framework that we have, the first pillar of that is that we will always want to have at least 50 million of cash. That gives us flexibility for a sudden downturn in the economy or a small acquisition or something like that. And that comes at December in our working capital cycle, as you know. So we always aim to have at least 50 million at the year end. It's not an absolute, but it's a guide. Clearly at the moment we have more than that, and that's why we've been paying a dividend that's been higher than our cover range, and we've been buying back shares. As we now pivot more towards using our cash for investments, we'll continue with the dividend in the range, but actually the buybacks will slow down. What we will judge over the coming years is the speed of rollout of our estate, And so our capex level is a little bit uncertain because we really want to go after this opportunity But as David explained building the pipeline can take some time So if we are as fast as we would like to be we will find that there won't really be much Excess cash versus that 50 million at the year-end if you look forward a year or two If it's a little bit slower to build out then maybe that there will be but for now we're going to keep the cash that we've got because we have ambitions to go as fast as we can and

and and just on the current sort of like geopolitical or macroeconomic backdrop um i mean one of the benefits of of wix not only the fact that we run a very curated range and we're not seasonal is we we have a high sourcing sort of like focus in the uk so around about 70 to 75 percent of our cost of goods are domestic in the uk only about seven percent of our money do we spend with asia so we don't have much product moving around in terms of shipping some but But we're reasonably insulated. We're not completely immune, but we're reasonably insulated to that stuff. And likewise, when we think more immediately about the ability to run our network and our stores, we're hedged to at least well into next year, aren't we?

Yeah, so we've hedged our energy for 100% in 2026 and 50% of 2027. So we're well protected for any kind of short or medium term crisis.

And then where it plays out in terms of the consumer sentiment at the moment, we're not seeing any change right now. We'll see how we move through the rest of the year. But I think it's always worth reminding, it's a £35 billion market. We're a property-owning democracy, and our homes are still the oldest in Europe. So there's always a demand for repair and maintenance on that big asset that we own as a nation. So in that market, given our share, there's always opportunity for growth.

Good morning, Kate Calvert from Investec. A couple of questions for me. First of all, could I ask you about your thoughts on gross margin going forward and the sort of main drivers? Because obviously you saw quite a good improvement in 25. My second question is on your click and collect. You said that 85% rated you good, excellent. What do the other 15% not like about your click and collect? And my final question, I'm just interested in your thoughts on the market growth of these energy efficient solutions. It sort of hasn't really taken off, obviously, as yet. What can you see coming down the pipeline? And when do you think it might start to develop?

Yeah, so starting with gross margin, yeah, this year it was a good year. Part of that was actually a change in our consumer credit costs coming down as interest rates came down, and so that was more of a one-time shift. As we expect in 2026 now, interest rates probably won't move too much. If there is a decline, it'll be very gradual, so it'll be harder to spot that. But the business has traded well. When you trade well on volume, that makes you very popular with suppliers, so that's helpful in terms of negotiations and volume-based rebates and things like that. But broadly, the way to plan for our business is assume a flat gross margin. Our route to growing our profit is to grow the top line keep gross margin flat, and then get into a virtuous cycle where if we can get better buying terms, we can invest that in price and get the flywheel going again.

On Click and Collect, been in retail for a while now, Kate, as you know, I've got to be honest, nearly nine out of 10 customers rating is excellent or good in a service where you're pick packing and dispatching tons of products in under 15 minutes is no short order at all. It's a phenomenal job done by my colleagues to hit those milestones. I think it's worth remembering that only 18 months ago, our Click and Collect service was 60 minutes. We reduced it to 30 minutes, and now we're doing it in 15. And on the same glide path, the customer satisfaction has gone up because speed matters. The speed, accuracy, and availability really, really matter. Where you might get the people that are less than happy is if it isn't quick enough or maybe not the complete orders there. But I'm very, very delighted to see 9 out of 10, almost, of orders are in the excellent and good. That's a really job well done.

Then on home energy, which was your third question, I mean, we see this as a very good long-term opportunity where if you were to combine air source heat pumps, solar, and everything that goes with solar, including batteries and inverters, plus EV charging points for homes, that market would be 10 to 12 billion annually within five to six years. So a really big opportunity. It's driven by short and long-term trends. Obviously, the longer-term trend for us to reduce the carbon footprint of our homes, and the government is clearly making that a priority. The recent announcement hasn't got all of the detail yet of exactly how consumers will be supported, but certainly the direction of travel is that the government wants to support this. But then short-term news flow can also affect it. So when we were in the energy crisis of autumn 2023, solar, for example, saw a big spike in interest. And it'll be interesting to see how the current crisis unfolds, whether that gets people thinking again about energy security for their own home, trying to reduce the cost of energy. So we're very confident that this is going to be a big market. As David said, the UK housing stock is the least efficient of any in Western Europe. If we are going to reduce the carbon footprint in the country, we've got to do something about retrofitting our homes.

Thanks. Hi there, Andy Wade from Jefferies. A few questions on the upped store target plan. Obviously big news today, so no surprise there's a lot of questions on it, I suppose. The first one, what sort of changed in your thinking? I think you did talk to performance and the smaller format stores. Are those the main things? How well the business is trading overall and the success of the smaller format stores overall? have you changed your hurdle rate expectations or recut the analysis at all, or is that what it is? So that was the first one. Second one, just to touch back on Matthew's line of questioning on the smaller stores, but same EBITDA, is that you've got a lower revenue, lower rent, same EBITDA, or is it that they're in locations that have got a higher sales intensity despite the smaller footprint? So just sort of working through how that works. Is there any element that, because you will have picked, obviously, decent sites first to trial it, is there a risk that later sites aren't quite as productive as the sites that you've picked, first of all? And then on the same theme, you talked to the new store pre-opening sort of drag of 3 million, presumably. And you did hint at this during the presentation. We should be expecting that to increase from, say, 3 to maybe 6. Yeah, that'll do for now.

I think you do too. Just for them? Yeah, OK.

Sort of two, but with some questions.

But with sections within, which is always good, Andy, to follow, not least when you're writing it down. So firstly, on why the shift in the emphasis and the speed, I think it's fair to say over the last five years, our priority has exclusively been getting the estate we've got, which are brilliant stores in super locations, to the best they can be for the Wix format. So it's all been about the refit. And we've been less focused on the expansion because most importantly, we want to drive those incremental light for light returns from the assets we've got and keep them in a really healthy condition. Having almost completed that journey, not complete complete, but almost completed that journey and moving more into a refresh and maintenance model for the existing estate, Now is the time to step forward. And we can step forward with confidence because we've demonstrated over the last four or five years the performance of this business. So we see it as an opportunity. And we've always said, and Mark and I have always operated by the mantra, in tough economic climates, strong businesses get stronger because they've got the clarity and the confidence to invest. And they know the returns they're going to get. So it's much more about that play from our perspective now. We've done the refit. We're moving into new stores, but we feel really confident now given the batch of stores we have around that size and how they're performing that we can really kick on and take that opportunity sooner. rather than later. So I think we've demonstrated our capability of doing that. Site selection, by the way, we're not in a space race. As I said, sort of like when I was standing here earlier, this is absolutely about disciplined lay down of capital. So site selection will be really, really important that we're picking sites that will work for the next 20, 30, sort of like 40 years. So we're not picking anything. We're being really, really quite sort of like, you know, highly selective, highly prudent in terms of where we do go. Because it's the right thing to do when you're laying down capital. This is not a race for us. This is a proven model that we believe will prove out in more and more towns as we move around the UK. There are two other bits to those four questions which I didn't cover, so if you can help me on the bits I don't know that I've missed.

On the EBITDA question, you're exactly right. It's a lower rent bill, which means that we can take a site and have a slightly lower revenue and still achieve a similar level of profitability. It's as simple as that, which is why David's describing us to be able to move into slightly smaller catchments. And then in terms of whether the sites will be less productive in the future, no, we don't think so at all. We're learning all of the time, and we're refining the model all of the time. And the sites that we've opened in the last three years, of course, have been opened in a period that hasn't been great for the economy, and yet still we're confident about it. So I think that's a good sign. Pre-opening costs and losses in early months, yes, that will, as we ramp up the network expansion, that will become a bigger factor and we can help guide you to that as it comes. So it will be a factor we have to build in. As you imagine a five-year plan going where you're building and building the rate of opening, actually the profitability is always a little bit delayed because you've got those growing pre-opening costs as well. But I think we'll provide the confidence of the performance of the new stores, and so we're very confident that it will come.

Great, thanks. Thank you, Andy. Ben's at the back there.

Just to sort of add on Andy's question, push you a bit harder on the sort of profile of the maturity of those stores. When do they actually break even? And what's the sort of shape of that maturity to get to that 25% in five years? Question number one.

Yeah, they will be breaking even probably after about 12 months. And some stores are profitable almost immediately. But as David says, it's different for the different parts of our business. Design installation takes off very quickly. Actually, the opening of a new showroom in an area really seems to create a buzz and attract a lot of people. And then on the retail side, DIY comes first. But the trade have their habits of where they've been shopping. And it just takes a little bit longer to build the TradePro base in each store. And we've seen that pattern in pretty much every store we've opened in the last few years. So actually, the drag on profit doesn't last very long. I'd say 12 months on average. But still the point to reach maximum profitability from that point is probably another three to four years. So we aim for four to five years, at which point we think it's going to be mature.

All right, and then I guess you've held your, you're comfortable with consensus, I guess, this year, and some might argue that it's looking quite ambitious or stretching. What sort of levers have you got in case things do get a bit volatile with volumes and et cetera, et cetera? Yeah.

So, yeah, it's another sort of mid-teens growth in PPT if you were to look at consensus. But we're a business that has operational leverage, as we've proven this year. If we grow sales, profits will grow faster than sales, typically. And we're confident in our model. As David said, this is a very big market, $35 billion. The economy didn't give us any help in 2025 and we managed to grow the business nicely. Our aim will be to do so again in 2026.

Yeah, a bit of a follow-up on Ben's question. You did very well to come close to mitigating the inflation, the cost inflationary pressures last year. I presume there is some annualisation effect of the actions you took last year to feed through this year. So could you quantify that? And then just in terms of what additional, because I think you've been confident about there being further opportunity, do you want to talk about some of the projects that might come through in the course of the current year and what that might amount to?

Yeah, so, I mean, first of all, cost inflation in 26 probably won't be as high as 25 on a percentage basis because we had the big impact last year of the national insurance uplift and also a pretty high national living wage, but that living wage, as you know, has come down as an increase. Energy, we are... locked in for the whole of 2026 and half of 2027, as I mentioned. So I think inflation itself will be a bit lower. And as you say, we've got some benefit of the annualization of full-year effect of the measures we put in in 25. We haven't quantified that externally, but every year we have a bit of a starting, a rolling sort of benefit, and then we build on that with new initiatives.

I'm not dodging the question here, Matthew, in terms of citing stuff, but the reality is the big rocks we've landed in recent years. When it comes to productivity, it really is the sharpening of what you're doing in terms of the value chain. There's nothing meaningful that I would call out outside of the fact that now it does demand that you do a number of small things brilliantly to build up a productivity bucket, which we do every year. We're always challenging ourselves how efficiently and effectively we're running the organization. But I wouldn't cite any major opportunity.

It's lots of... And just to reiterate what we said in the past, which is productivity for us is not about making the customer experience worse. It's about finding ways to do things more efficiently that make the customer experience better and the operating costs lower for Wix.

Any questions online, Scott? Nope. We're being covered in the room. So back to you, David, for closing remarks. Wonderful. Well, as ever, thank you very much for attending this morning's presentation. Really, really appreciate the questions. I mean, hopefully you got a real sense today that this is a strong business doing very, very well. It was a super year last year. Critically, all underpinned by volume growth and growth of customers, us appealing to more people in the market. We plan to continue to do that with confidence. And as I say, the big news today is the announcement of us accelerating the new store opening programme. So we continue to look forward to a bright future full of growth as we step forward. Thank you.