- Wickes raises full year 2024 guidance
- Halfords upgrades full year 2025 profit expectation
- Wickes shares up 11%, Halfords shares up 19%
Shares in Wickes (WIX) gained over 11% to 170p in morning trading as the DIY retailer reported a strong trading update for the six months ending 28 December.
The company delivered continued sales and volume growth in retail with revenue up 3% year-on-year.
Wickes also raised guidance for full year 2024. It expects adjusted pre-tax profit to be towards the upper end of the £39.7 - £44 million consensus forecast range.
Highlights for Wickes included improvements with its Design & Installation business, however it reported a 2.5% fall in revenue growth to £159.7 million for the six months ending 28 December saying, ‘the decline in revenue slowing considerably.’
Wickes said it increased market share in interior paint, decorative accessories, and garden projects.
Retail TradePro performed strongly also with sales up 14% year-on-year in the second half ‘as local trade professionals continue to choose Wickes to save them time and money.’
The company said the balance sheet remains strong with net cash at the year-end of £86.3 million, after the acquisition of our 51% stake in Solar Fast for £5.1 million and the completion of the £25 million share buyback programme and the sale and leaseback of our Braintree store, which raised £6.2 million.
HALFORDS SURPRISES WITH UPGRADE
Shares in Halfords (HFD) gained over 19% to 150p in morning trading as the bikes-to-car batteries retailer upgraded its underlying pre-tax profit forecast for full year 2025 from £32 million to £37 million.
The reason for the upgrade Halfords said was due to ‘continued progress on a number of key initiatives, including our pricing and promotion strategies and cost reduction measures.’
The company benefitted from positive like-for-like sales growth in the third quarter in both Retail and Autocentres businesses.
Christmas proved to be particularly positive for Halfords particularly in cycling where ‘Christmas gifting contributed to like-for-like sales growth of 13.1% in December.
EXPERT VIEWS
Julie Palmer, Partner at Begbies Traynor: ‘Wickes will be satisfied with its 2024 performance as the DIY chain has proven its ability to insulate itself against some of the most acute trends afflicting the wider sector.
‘In this environment, customers are clearly going to be more cautious about splashing out discretionary spending, so it is no small feat for Wickes to have grown retail revenues even if by just a small amount.
‘Importantly, it continued to grow market share in a highly competitive space. So, against a really challenging backdrop, Wickes has demonstrated how it can cater to evolving consumer needs and there are even some positive signs of a turnaround in its pricier design & installation division.
‘However, it is impossible to ignore the challenges on the near horizon and Wickes will be affected by the government’s increases to both national insurance contributions and the national minimum wage later this year.
‘For now, though, Wickes is doing a very good job at navigating tricky economic conditions and avoiding a boom-and-bust cycle.’
Panmure Liberum analysts expressed relief about Halfords, welcoming the company’s upgrade but remain cautious: ‘A combination of better-than-expected trading over the peak period and into current trading coupled with an improving cost outlook led to sizeable consensus forecast upgrades this year.
‘However, we expect a flat profit profile going forward given the tough economic backdrop. Earnings momentum has clearly turned here, and comparatives remain soft, but we are not convinced Halfords is entering into a new upgrade cycle.’
