Wickes has been helped by a recovering housing market but its performance has still been impressive. Its gross margins have improved from 28.2 per cent to 30.3 per cent over the year while like-for-like sales rose by 10.2 per cent, increasing to 18 per cent in current trading.
The stores have enjoyed a recent boost by the warmer weather which has coaxed out more DIY enthusiasts than at this time last year but Wickes is still performing ahead of the industry average.
The shape of the business is now more simple, with the last of the non- UK businesses sold last year. The pounds 16m loss on the sale of continental European operations pushed the group pounds 6.4m into the red in the year to 31 December. But profits from continuing operations improved from a pounds 37m loss to a pounds 12m profit.
The company is still doing well at the heavy end of the DIY market but feels it is missing out in the decorative sector. To address this it is testing refits in six stores that will stock an additional 500 lines in all coverings and floorings to grab a little market share. This risks fighting on the home ground of rivals such as Homebase and B&Q but if the trial is successful the concept will be rolled out across the estate.
On upgraded profit forecasts of pounds 25m this year, the shares trade on a forward rating of 13 if a full tax is assumed. With a bid still possible the shares look decent value.