An “encouraging” first half of the year for home improvement retailer Wickes has led the company to launch a share buyback scheme
The DIY and garden centre firm reported sales growth of three per cent in the second quarter of the year, and 0.7 per cent in the first half overall.
Following its positive results this morning, its share price rose by more than 5.5 per cent, as investors were buoyed by the share buyback scheme, and prospects of its continued resurgence in the summer months.
It saw a an up-tick in its ‘DIFM’ (Do It For Me) service, up almost six per cent in the first six months of the year.
Wickes said of its core like-for-like sales in the second quarter, ahead by 2.3 per cent, Brits bought decorative and constructive items, as they used the summer weather to do outdoor projects.
The first quarter of the year was less strong, with sales down 1.8 per cent, and core like for like down 4.4 per cent. However, in March of this Wickes said it was not as worried by the DIY drop off because sales were ahead of pre-Covid levels, and the summer would give the industry a boost.
The firm also said its core trade sales performed well, as order pipelines improved on last year, following the Russian invasion of Ukraine.
Click and collect sales also performed well, up 5.6 per cent and DIY sales, though they are still down year-on-year.
Costs are “well controlled”, it said, as six store refits had been completed this year, and a new outlet had also opened, with two more planned by the end of the year.
With an improving outlook, it announced a new capital allocation which “reflects confidence in the company’s strategy and strong balance sheet.”
Included in the new spending policy is a bid to maintain a dividend at 10.9p per share. A share buyback scheme of £25m was also announced today.
David Wood, CEO of Wickes, said “this has been an encouraging first half”.
Our performance has been underpinned by further momentum in Trade, as local traders continue to turn to Wickes to save them time and money, an improving trend in DIY, and a good performance in Do-It-For-Me.”
He added, the revised capital allocation policy, “reflects confidence in the company’s strategy and business model. The policy focuses on delivering additional shareholder returns through a maintenance of the FY2023 dividend and the launch of a £25m share buyback programme.”