Investment Column: Wickes is back from the brink

FOR A company that was on the brink of extinction 18 months ago, Wickes has had a remarkable run. Shares in the DIY retailer have almost doubled over the past year, closing up a further 4p at 300p yesterday on the back of a return to profitability and the first dividend payment for two-and-a-half years.

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.

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When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
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He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
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I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
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