Wickes sees homeowners cut back on projects but sales to building trade remain strong

Homeowners' reluctance to splash out on new kitchens and bathrooms in the current economic climate has taken a toll on profits at home improvement chain Wickes.

Its owner Travis Perkins also estimates the UK's DIY market has undergone a 25 per cent contraction since its pre-recession peak in 2007.
Travis warned trading conditions could deteriorate further in 2012 amid rising unemployment and the weak housing market, with its retail arm set to bear the brunt of the pain.

The retail division, which includes 200 Wickes and 107 Tile Giant stores, saw profits slip by £14million to £45million in 2011.
However, the company managed to generate an overall 37 per cent jump in profits to £297million after strong trading at its merchants' arm and the purchase of plumbing and heating firm BSS.

The retail arm saw like-for-like delivered sales fall 1.4 per cent in 2011, while its performance worsened to a 3.1 per cent decline in the first seven weeks of 2012.

Like-for-like sales across the group were nevertheless up 6 per cent over the year, boosted by a strong performance by the builders' merchant arm, which outperformed smaller independent stores.

Group revenues increased 52 per cent to £4.8billion, helped by the £558million acquisition of the BSS business. The total annual dividend was hiked 33 per cent to 20p.

Shares in Travis were 5 per cent or 49.5p higher to 1,060.5p in early afternoon trading.
Earlier this year the group announced a £24million deal to buy the 70 per cent of the 100-store strong retailer ToolStation that it does not already own.

Today it expressed surprise that the Office of Fair Trading had recently raised concerns about the acquisition, given that the deal with Somerset-based Toolstation had created 'a new and robust competitor in the multi-channel market'.
It added: 'We are in the process of responding to the initial enquiry and are confident that the issue will be satisfactorily resolved.'

Source: This is Money.co.uk
http://www.thisismoney.co.uk/money/markets/article-2104852/Wickes-owner-sees-homeowners-cut-projects-building-trade-sales-remain-strong.html