Wickes chief leaves as recovery is delayed

WICKES, the DIY retailer, has announced the departure of its group managing director and warned of continuing poor performance in its timber division, writes Russell Hotten.

Shares dropped 9 per cent as analysts cut profit forecasts, though they said the underlying recovery would continue.

Wickes' chairman, Henry Sweetbaum, said yesterday that problems at the timber businesses had nothing to do with Dick Clark leaving the company. He will be replaced by Bill McGrath, chairman of Wickes Retail Group.

Wickes bought two businesses, Malden Timber and Hunter Timber, at the top of the market in 1988 and has suffered as recession hit the retail sector.

Mr Sweetbaum said the expected third-quarter increase in demand for timber had not materialised. He said neither timber company was for sale. Sales in the retail operation were in line with expectations, he added.

In the six months to June Wickes turned a pounds 12.9m pre-tax loss into a pounds 2.57m profit, after cost-cutting at the timber companies. There was no dividend.

John Richards, at County NatWest, slashed his full-year profit forecast from pounds 14m to pounds 9m, but added: 'Wickes is a good potential recovery stock. It's just that recovery has been deferred.'

Wickes has signed an pounds 80m four-year credit facility with 10 banks to replace an 18-bank multi-option facility that expires next year. Shares fell 8p to 79p.