For the first time recently demerged DIY chain Wickes’ can apply the ‘It’s got our name on it’ slogan to one of its own trading updates.
And the company is off to a pretty impressive start, with sales growth tracking well ahead of not just last year’s pandemic-disrupted trading but also the same period in 2019, helping the company to make a good impression on the market by guiding for profit at the top end of expectations.
“The company operates in a fragmented market which is benefiting from a post-Covid home improvement boom so now is a pretty good time to strike out on its own following its split from Travis Perkins,” says AJ Bell financial analyst Danni Hewson.
“Basically if the company can’t make it work now then it would never be able to. Wickes has exposure to both DIYers and, for those who have accepted their limitations, the ‘Do It For Me’ brigade given its significant business selling to trade customers.
“There is only a brief mention in today’s update of supply issues despite widespread evidence that the cost and availability of some materials is an increasing problem.
“The danger is that enthusiasm for domestic renovations hits the obstacle of prohibitive costs and delays, thus stopping the current boom in its tracks.
“This could leave Wickes exposed in a competitive market and remind investors why Travis Perkins was keen to spin off the business in the first place.”