Nightmare is over for Wickes

Henry Sweetbaum, chairman of Wickes, must regret he ever heard of Hunter Timber and Builders Mate. The group had done very well at DIY retailing but its diversifications have proved a disaster, as yesterday's results showed.

The thumping pounds 258m loss in the year to December was due to the cost of selling or closing the unwanted businesses. The total costs ran to pounds 269m, which included a pounds 186m goodwill write-off from the original 1988 purchase of Hunter Timber. The loss on the sale and closures amounted to a higher than expected pounds 83m, as market conditions deteriorated as the sale process continued.

Fortunately for Wickes and its shareholders, the nightmare is now over. Hunter Timber has been passed on to a Finnish group and Builders Mate sold off piecemeal. Wickes is back to just DIY sheds again - exactly where it was in 1988. Significantly it is now the only pure DIY play in the retail sector, as the other groups such as B&Q and Homebase are part of larger groups.

Wickes' core DIY business is still the pick of the sector. In its 111 UK stores, like-for-like sales increased by 11 per cent and operating profits were up 9 over cent. This is in spite of a weak market which is now struggling against a harsh winter.

The company now has 153 branches in five countries and is expanding in South Africa, where it has three stores with another four planned for this year. However, there were difficulties on the Continent, where Wickes has struggled against poor weather, weak economies and management upheaval.

That Wickes shares only dipped 4p to 121p yesterday shows that the City was already braced for bad news. The house broker, SBC Warburg, is forecasting profits of pounds 40.5m for the current year, which puts the shares on a forward rating of 16. A rerating is likely to take time and, given the fragility of the housing market, they are high enough.

Start your day with The Independent, sign up for daily news emails
Sport
footballHe started just four months ago
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Travel
Streets ahead: Venice
travelWhat's trending on your wishlist?
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect